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The bonds of a company bear a 13% coupon rate, payable semiannually. The bonds mature in...

The bonds of a company bear a 13% coupon rate, payable semiannually. The bonds mature in 11 years and have a $1,000 face value. Currently, the bonds sell for $924.00. What is the yield to maturity?

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Answer #1

Ans:- In this question, we need to find the yield to maturity. we will use the RATE function of excel to find the answer.

Nper=11*2=22,Pmt=$1,000*13%/2=$65,PV=-$924,FV=$1000

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Note:- we have multiplied by 2 because the coupon is paid semi-annually and we need to convert it to annually to find the correct YTM.

Therefore, the Yield To Maturity of the Bond is 14.40%.

Note:- If this answer helps you pls give thumbs up.

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