The Salem Company bond currently sells for $936.37has a coupon interest rate of 11% and a $1000 par value, pays inter...

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The Salem Company bond currently sells for $936.37has a coupon interest rate of 11% and a $1000 par value, pays inter...

The Salem Company bond currently sells for $936.37has a coupon interest rate of 11% and a $1000 par value, pays interest annually, and has18 years to maturity.

a. Calculate the yield to maturity (YTM) on this bond.

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Answer 1

Answer #1

Soluton (P) Pre $936.37 OR 0.1 Coupon fnterestdate F)Par Valne OR face value = $1DO0 h) No.eato maturi= 18 yara YTm) yield to $63.63 YTm- 10 + 10 3.53S 1936.37 $968.185 YTm $113.535 0.11736 $968.10S YTm- 0.1173 OR 1173 (YTm) Yield to matur= 73 %

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Answer 2

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