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Smiths Corporation’s bonds have 15 years remaining to maturity. Interest is paid annually, the bonds have...

Smiths Corporation’s bonds have 15 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 12%. The bonds sell at a price of $1,100. What is their yield to maturity? Round your answer to two decimal places.

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Answer #2

Annual coupon = 12%*$1000

= $120

Yield to maturity is calculated using rate function in excel below

Yield to maturity is therefore = 10.64%

answered by: anonymous
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