Question

The Petit Chef Co. has 10.1 percent coupon bonds on the market with ten years left...

The Petit Chef Co. has 10.1 percent coupon bonds on the market with ten years left to maturity. The bonds make annual payments and have a par value of $1,000.

If the bonds currently sell for $1,155.73, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Current Price = 1155.73

Coupon 10.1%

Maturity = 10 years

Let's assume the YTM be 7%

Value of Bond =

=

= 1217.73102778

Now,

Let's assume the YTM be 8%

Value of Bond =

=

= 1140.91170938

YTM = Lower Rate + (\frac{Surplus}{Surplus + deficit}) * (Higher Rate - Lower rate)

= 7% + ((1217.73102778 - 1155.73) / (1217.73102778 - 1155.73) + (1155.73 - 1140.91170938)) * (8-7)

= 7% + (62.001027778 / 76.98193184) * 1

= 7% + 0.8071020294

= 7.81%

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
The Timberlake-Jackson Wardrobe Co. has 11.2 percent coupon bonds on the market with eleven years left...
The Timberlake-Jackson Wardrobe Co. has 11.2 percent coupon bonds on the market with eleven years left to maturity. The bonds make annual payments and have a par value of $1,000.    If the bonds currently sell for $1,157.26, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to maturity             %
The Timberlake-Jackson Wardrobe Co. has 11.7 percent coupon bonds on the market with eleven years left...
The Timberlake-Jackson Wardrobe Co. has 11.7 percent coupon bonds on the market with eleven years left to maturity. The bonds make annual payments and have a par value of $1,000.    If the bonds currently sell for $1,153.60, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to maturity   
Hacker Software has 10.6 percent coupon bonds on the market with 17 years to maturity. The...
Hacker Software has 10.6 percent coupon bonds on the market with 17 years to maturity. The bonds make semiannual payments and currently sell for 108.1 percent of par. What is the current yield on the bonds? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the YTM? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the effective...
Bart Software has 8.9 percent coupon bonds on the market with 24 years to maturity. The...
Bart Software has 8.9 percent coupon bonds on the market with 24 years to maturity. The bonds make semiannual payments and currently sell for 111.5 percent of par. a. What is the current yield on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)...
Bart Software has 7.7 percent coupon bonds on the market with 24 years to maturity. The...
Bart Software has 7.7 percent coupon bonds on the market with 24 years to maturity. The bonds make semiannual payments and currently sell for 108.5 percent of par. a. What is the current yield on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)...
Lycan, Inc., has 8.5 percent coupon bonds on the market that have 8 years left to...
Lycan, Inc., has 8.5 percent coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 10.5 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price            $
The Andromeda Co. has new 5% percent coupon bonds on the market with a maturity of...
The Andromeda Co. has new 5% percent coupon bonds on the market with a maturity of 15 years. The bonds make annual payments and have a par value of $1,000. If the bond's current price is $950, what is the YTM? Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Ackerman Co. has 6 percent coupon bonds on the market with eleven years left to maturity....
Ackerman Co. has 6 percent coupon bonds on the market with eleven years left to maturity. The bonds make annual payments. If the bond currently sells for $946.72, what is its YTM? Assume a par value of $1,000. a. 6.70% b. 5.31% c. 7.31% d. 6.34% e. 5.64%
1. West Corp. issued 15-year bonds two years ago at a coupon rate of 8.2 percent....
1. West Corp. issued 15-year bonds two years ago at a coupon rate of 8.2 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) YTM = % 2. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments....
Sun Tans Co. has 7 percent coupon bonds on the market that has 4 years left...
Sun Tans Co. has 7 percent coupon bonds on the market that has 4 years left to maturity. Face value of the bond is $1,000. The bonds make annual coupon payments. If the YTM on these bonds is 11%, what is the current bond price?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT