Fresh Fruit, Inc. has a $1,000 par value bond that is currently selling for $867. It has an annual coupon rate of 10.51 percent, paid semiannually, and has 26-years remaining until maturity. What would the annual yield to maturity be on the bond if you purchased the bond today and held it until maturity?
Calculate the yield to maturity as follows:
Therefore, the semiannual rate is 6.106%.
Therefore, annual yield is 6.106%*2 12.21%.
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