Question

Suppose the following bond quotes for IOU Corporation appear in the financial page of today’s newspaper....

Suppose the following bond quotes for IOU Corporation appear in the financial page of today’s newspaper. Assume the bond has a face value of $1,000 and the current date is April 19, 2012. What is the yield to maturity of the bond? (Assume coupons are paid semiannually.) (Enter your answer as a percentage, omit the "%" sign in your response, and enter your answer with two decimal places. For example, 1.214% should be entered as 1.21.) Company (Ticker) Coupon Maturity Last Price Last Yield EST Vol (000s) IOU (IOU) 7.4 Apr 19, 2036 82 ?? 1,845

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Answer #1

The solution to the given question is provided below:
Yield to maturity of the bond=RATE(24*2,7.4%*1000/2,-82%*1000,1000)*2
=9.2847%

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