A corporation has an outstanding bond with the following characteristics: Coupon Rate 6.0% Interest Payments Semi-Annually...

Question

Question

A corporation has an outstanding bond with the following characteristics:

What is the yield to maturity (YTM) for this bond?

**Please show how you got the answer**

business finance

Answer 1

Answer #1

Using financial calculator
PMT=6%*1000/2=30
FV=1000
PV=-854.64
N=20*2=40
CPT I/Y=3.70%

Hence, yield to maturity YTM=3.70%*2=7.40%

Answer 2

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