Calculate the yield to maturity (YTM) for a one-year coupon bond with a purchase price of...
Calculate the yield to maturity (YTM) for a one-year coupon bond with a purchase price of $8000 a face value of $10000 and a current yield of 10%. The yield to maturity is nothing%. (Round your response to one decimal place.)
Homework Answers
Face value = $ 10,000
Purchase price = $ 8,000
Current yield = 10%
YTM = Capital Gain + Current Yield
YTM = 25 + 10
YTM = 35%
Or, we can determine YTM as follows. First calculate the coupon
Assume YTM = 35%
Therefore at YTM = 35%, LHS = RHS.
Hence YTM = 35%
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Calculate the yield to maturity (YTM) for a one-year coupon
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