| Calculate the yield to maturity on the following bonds. |
| a. |
A 8.6 percent coupon (paid semiannually) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $915. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) |
| Yield to maturity | % per year |
| b. |
An 5.7 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $911. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) |
| Yield to maturity | % per year |
| c. |
An 7.7 percent coupon (paid annually) bond, with a $1,000 face value and 8 years remaining to maturity. The bond is selling at $1,061. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) |
| Yield to maturity | % per year |
PLEASE SHOW THE WORK
|
Using financial calculator BA II Plus - Input details: |
a |
b |
c |
|
FV = Face value = |
-$1,000.00 |
-$1,000.00 |
-$1,000.00 |
|
PV = Bond price = |
$915.00 |
$911.00 |
$1,061.00 |
|
PMT = Coupon/frequency = |
-$43.00 |
-$14.25 |
-$77.00 |
|
N = Years to mature x frequency = |
20.00 |
40.00 |
8.00 |
|
CPT > I/Y = Rate = |
4.9810 |
1.7354 |
6.6907 |
|
Yield to Maturity = Rate * Frequency /100 = |
9.962% |
6.942% |
6.691% |
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