Question

Patch Inc. has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature in 6 years, and have a 9 percent coupon. The current price is $1,110. What is the yield to maturity? 6.74 percent 7.90 percent 4.39 percent 3.37 percent

Answer #1

**Given,**

**Face value = $1000**

**Years to maturity = 6 years**

**Coupon rate = 9%**

**Current price = $1110**

**Solution :-**

**Semi annual coupon payment (PMT) = $1000 x 9% x 1/2 =
$45**

**Semi annual periods (NPER) = 6 years x 2 =
12**

**FV = 1000**

**PV = -1110**

**Yield to maturity = 3.37% x 2 = 6.74%**

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