Question

There is a corporate bond in the market that is selling for $1,136.96 each, stated rate...

There is a corporate bond in the market that is selling for $1,136.96 each, stated rate of interest of 8.23% with a maturity of 3 years. What is the yield-to-maturity (YTM) of this bond?

How can i find the PMT that goes into the financial calculator?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

PMT is the key to input the coupon payment.

Coupon rate= 8.23%

Coupon payment= 0.0823*$1,000= $82.30

Information provided:

Face value= future value= $1,000

Market price= present value= $1,136.96

Time= 3 years

Coupon rate= 8.23%

Coupon payment= 0.0823*$1,000= $82.30

The yield to maturity is calculated by entering the below in a financial calculator:

FV= 1,000

PV= -1,136.96

N= 3

PMT= 82.30

  

Press the CPT key and I/Y to compute the yield to maturity.

The value obtained is 3.3550.

Therefore, the yield to maturity is 3.36%.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are eyeing an investment in a corporate bond which has a YTM of 5.57%, and...
You are eyeing an investment in a corporate bond which has a YTM of 5.57%, and a stated rate of interest of 3.38% with a maturity of 5 years. What is the price of this bond? What are the: N= I%= PV= PMT= FV= P/Y=1 C/Y=1
A bond has a coupon rate of 3%, pays interest semiannually, sells for $950, and matures...
A bond has a coupon rate of 3%, pays interest semiannually, sells for $950, and matures in 3 years. Face value=1000 a) Calculate the approximate YTM (yield to maturity). b) Calculate the YTM, using a financial calculator. c) What is the difference between the approximate YTM and the Real YTM in (b)?
BOND VALUATION Callaghan’s Motors’ bonds have 15 years remaining to maturity. Interest is paid semi-annually, they...
BOND VALUATION Callaghan’s Motors’ bonds have 15 years remaining to maturity. Interest is paid semi-annually, they have a $1,000 par value, the coupon interest rate is 9%, and the yield to maturity is 8%. What is the bond’s current market price? BOND VALUATION Nungesser Corporation’s outstanding bonds have a $1,000 par value, a 9% semiannual coupon, 8 years to maturity, and an 8.5% YTM. What is the bond’s price? BOND VALUATION and YIELD TO MATURITY Suppose a 10-year, $1000 bond...
A 10-year corporate bond has a coupon rate of 6% with annual payments. If interest rates...
A 10-year corporate bond has a coupon rate of 6% with annual payments. If interest rates rise to 7% on similar bonds then what is the value of the bond in the marketplace? A 10-year corporate bond has a coupon rate of 6% with annual payments. If interest rates rise to 5% on similar bonds then what is the value of the bond in the marketplace? A 10-year corporate bond has a coupon rate of 6% with semi-annual payments. If...
You are eyeing an investment in a corporate bond which has a YTM of 14.95%, and...
You are eyeing an investment in a corporate bond which has a YTM of 14.95%, and a stated rate of interest of 13.04% paid semi-annually, with a maturity of 20 years, and a PAR value of $1,000. What is the price of this bond?
1. A 100-year corporate bond has a coupon rate of 9% with semi-annual payments. If the...
1. A 100-year corporate bond has a coupon rate of 9% with semi-annual payments. If the current value of the bond in the marketplace is $400, then what is the Yield-to-Maturity (YTM)? 2. How much do you pay for a zero coupon government bond that has a term of 30 years, an interest rate of 9%, and a par value of $1000. 3. A taxable bond has a yield of 9% and a municipal bond has a yield of 4.6%....
Johnston, Inc. is selling bonds for $775.37. Each bond has an 8% coupon rate and makes...
Johnston, Inc. is selling bonds for $775.37. Each bond has an 8% coupon rate and makes payments semi-annually. The bond matures in 25 years. What is the bond’s yield-to-maturity? Shieldsly, Inc. has a 9 percent coupon bond that matures in 5 years. The bond pays interest annually. What is the market price of a $1,000 face value bond if the yield to maturity is 7.56 percent? $1,126.64 $1,000.00 $1,146.13 $1,058.17 $363.55
A corporate bond pays interest twice a year and has 16 years to maturity, a face...
A corporate bond pays interest twice a year and has 16 years to maturity, a face value of $1,000 and a coupon rate of 5.8%. The bond's current price is $1,353.74. It is callable starting 10 years from now (years to call) at a call price of $1,124. 1.What is the bond's (annualized) yield to maturity? 2.What is the bond's (annualized) yield to call? 3. If you buy the bond today and hold it as long as possible, which rate...
Find the price of a bond. The time is today. The $1,000 par value corporate bond...
Find the price of a bond. The time is today. The $1,000 par value corporate bond you are interested in has a 5% coupon rate, paid semi-annually. The maturity of the bond is 20 years. The rating agencies have determined that this company should have a B+ rating, making its yield be 6%. Show a time line of these cash flows.   What is the price you will have to pay for the bond? N                I                 PV              PMT           FV Same bond...
1) A bond will mature in 20 years. It has a 5% coupon rate and will...
1) A bond will mature in 20 years. It has a 5% coupon rate and will pay annual coupons. If the bond has a face value of $1,000 and a 4% yield to maturity, what should be the price of the bond today? What if YTM goes up to 5%? What if YTM goes up to 6%? (2) What would be the price of the bond above in (1) if the coupons were paid semiannually? (3) What is the relationship...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT