Question
Stilley Resources bonds have 20 years left to maturity. Interest is paid annually, and the bonds...
Stilley Resources bonds have 20 years left to maturity. Interest
is paid annually, and the bonds have a $1,000 par value and a
coupon rate of 21.5 percent.
Compute If the price of the bond is $1,270, what is the yield to
maturity?
Homework Answers
Answer #1
Par Value of Bond = $1000
Annual Coupon payment = $1000*21.5%
= $215
No of years to Maturity = 20 years
Current Price of Bond = $1270
Calculating the Yield to Maturity(YTM) of bond using EXCEL RATE FUNCTION:-
So, YTM is 16.76%
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