Question

Carla Vista, Inc., has bonds outstanding that will mature in 8 years. The bonds have a...

Carla Vista, Inc., has bonds outstanding that will mature in 8 years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $895.92, what is the yield to maturity that an investor who buys them today can expect to earn?

YTM?


EAY?


0 0
Add a comment Improve this question Transcribed image text
Answer #1

YTM=(( c-(F-P)/n))/(F+P)/2

face value (F)=1000

coupon rate=4.6

net proceeds(P)=895.92

n=8 years

Answer by using formula= 6.3%ytm

EAY=1000*6.3%= 630

Add a comment
Know the answer?
Add Answer to:
Carla Vista, Inc., has bonds outstanding that will mature in 8 years. The bonds have a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Carla Vista, Inc., has bonds outstanding that will mature in 8 years. The bonds have a...

    Carla Vista, Inc., has bonds outstanding that will mature in 8 years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $895.92, what is the yield to maturity that an investor who buys them today can expect to earn? (Round answer to 3 decimal place, e.g. 5.275%.) Yield to maturity%? What is the effective annual yield? (Round answer to 3 decimal...

  • Waterway, Inc., has bonds outstanding that will mature in 8 years. The bonds have a face...

    Waterway, Inc., has bonds outstanding that will mature in 8 years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $901.92, what is the yield to maturity that an investor who buys them today can expect to earn? (Round answer to 1 decimal place, e.g. 5.2%.) Yield to maturity Entry field with incorrect answer % What is the effective annual yield?...

  • Sample Test Problem 8.03 Wildhorse, Inc., has bonds outstanding that will mature in 8 years. The...

    Sample Test Problem 8.03 Wildhorse, Inc., has bonds outstanding that will mature in 8 years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $891.92, what is the yield to maturity that an investor who buys them today can expect to earn? (Round answer to 3 decimal place, e.g. 5.275%.) Yield to maturity What is the effective annual yield? (Round answer...

  • Carla Vista, Inc., has four-year bonds outstanding that pay a coupon rate of 8.00 percent and...

    Carla Vista, Inc., has four-year bonds outstanding that pay a coupon rate of 8.00 percent and make coupon payments semiannually. If these bonds are currently selling at $920.89. What is the yield to maturity that an investor can expect to earn on these bonds? (Round answer to 1 decimal place, e.g. 15.2%.) Yield to maturity % What is the effective annual yield? (Round answer to 1 decimal place, e.g. 15.2%.) Effective annual yield

  • Ten years ago, Simply Splendid Corp. issued 40 year bonds with a $1,000 face value and...

    Ten years ago, Simply Splendid Corp. issued 40 year bonds with a $1,000 face value and a 7 percent coupon rate, paid semiannually. Bond of this risk currently have a yield to maturity of 9 percent. How much would you expect to pay for one of these bonds today? Harley Group has outstanding $1,000 face value bonds that have a 6.5 percent coupon rate, paid semiannually, and mature in 18 years. They are currently selling for $935.15. What is their...

  • JJ Markets has 8 percent coupon bonds outstanding that mature in 11 years. The bonds pay...

    JJ Markets has 8 percent coupon bonds outstanding that mature in 11 years. The bonds pay interest semiannually. What is the market price per bond if the face value is $1,000 and the yield to maturity is 9 percent?

  • Pharoah, Inc., has four-year bonds outstanding that pay a coupon rate of 7.70 percent and make...

    Pharoah, Inc., has four-year bonds outstanding that pay a coupon rate of 7.70 percent and make coupon payments semiannually. If these bonds are currently selling at $914.89. What is the yield to maturity that an investor can expect to earn on these bonds? (Round answer to 1 decimal place, e.g. 15.2%.) Yield to maturity What is the effective annual yield? (Round answer to 1 decimal place, e.g. 15.2%.) Effective annual yield

  • Sandhill, Inc., has four-year bonds outstanding that pay a coupon rate of 7.50 percent and make...

    Sandhill, Inc., has four-year bonds outstanding that pay a coupon rate of 7.50 percent and make coupon payments semiannually. If these bonds are currently selling at $918.89. What is the yield to maturity that an investor can expect to earn on these bonds? (Round answer to 1 decimal place, e.g. 15.2%.) Yield to maturity % What is the effective annual yield? (Round answer to 1 decimal place, e.g. 15.2%.) Effective annual yield %

  • 1) New Markets has $1,000 face value bonds outstanding that pay interest semiannually, mature in 20...

    1) New Markets has $1,000 face value bonds outstanding that pay interest semiannually, mature in 20 years, and have a 5.8 percent coupon. The current price is quoted at 103.25. What is the yield to maturity? 2)   American Hat has $1,000 face value bonds outstanding with a market price of $1,150. The bonds pay interest semiannually, mature in 8 years, and have a yield to maturity of 5.98 percent. What is the current yield? Please explain with simple formula

  • Roadside Markets has 8.82 percent coupon bonds outstanding that mature in 11 years. The bonds pay...

    Roadside Markets has 8.82 percent coupon bonds outstanding that mature in 11 years. The bonds pay interest semiannually. What is the market price per bond if the face value is $1,000 and the yield to maturity is 7.2 percent?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT