My calculations were:
PV=.9727*1000=972.7/2= 486.35
FV= 1000
PMT= .0876*1000=87.6/2= 43.8
R= (We are trying to find R)
N= 23*2= 46
Once this is all imputed into the calculator I get R= 9.18
but for some reason it says I am wrong, So I am trying to figure out what I am missing.
"Firm X has 8.76 percent coupon bonds on the market with 23 years to maturity. The bonds make semiannual payments and currently sell for 97.27 percent of par. What is the current yield on X's bonds?"
| current yield = coupon rate*par value/current price |
| Current yield%=(8.76/100)*1000/972.7 |
| Current yield% = 9.01 |
My calculations were: PV=.9727*1000=972.7/2= 486.35 FV= 1000 PMT= .0876*1000=87.6/2= 43.8 R= (We are trying to find...