Question

Stone Sour Corp. issued 21-year bonds 4 years ago at a coupon rate of 9.14 percent. The bonds make semiannual payments. If these bonds currently sell for 104 percent of par value, what is the YTM? (Enter your answer as a percentage, omit the "%" sign in your response, and enter your answer with two decimal places. For example, 1.214% should be entered as 1.21.)

Answer #1

**Yield to Maturity [YTM] of the
Bond**

Yield to Maturity [YTM] = Coupon Amount + [(Par Value – Bond Price) / Maturity Years] / [(Par Value + Bond Price)/2]

Par Value = $1,000

Semi-annual Coupon Amount = $45.70 [$1,000 x 9.14% x ½]

Bond Price = $1,040 [$1,000 x 104%]

Maturity Period = 34 Years [(21 Years – 4 Years) x 2]

Therefore, Yield to Maturity [YTM] = Coupon Amount + [(Par Value – Bond Price) / Maturity Years] / [(Par Value + Bond Price)/2]

= [$45.70 + {($1,000 – $1,040) / 34 Years)] / [($1,000 + $1,040) / 2}]

= [($45.70 - $1.1765) / $1,020]

= 0.04345 or

= 4.345%

Semi-annual YTM = 4.345%

Therefore, the annual YTM = 8.69% [4.345% x 2]

**“Hence, the Yield to
Maturity [YTM] of the Bond would be 8.69%”**

Skolits Corp. issued 20-year bonds 2 years ago at a coupon rate
of 7.4 percent. The bonds make semiannual payments. If these bonds
currently sell for 104 percent of par value, what is the YTM?
(Do not round intermediate calculations. Enter your answer
as a percent rounded to 2 decimal places, e.g.,
32.16.)
YTM
%

Now let's say that Bourdon Software has 6.7 percent coupon bonds
on the market with 18 years to maturity. The bonds make semiannual
payments and currently sell for 105 percent of par. What is the
YTM? (Enter your answer as a percentage, omit the "%" sign in your
response, and enter your answer with two decimal places. For
example, 1.214% should be entered as 1.21.)

3.Ngata Corp. issued 12-year bonds 2 years ago at a coupon rate
of 9.2 percent. The bonds make semiannual payments. If these bonds
currently sell for 104 percent of par value, what is the YTM?

West Corp. issued 21-year bonds 2 years ago at a coupon rate of
9.9 percent. The bonds make semiannual payments. If these bonds
currently sell for 101 percent of par value, what is the YTM?
Multiple Choice A. 8.80% B. 11.74% C. 9.78% D. 4.89% E.
10.76%

Bourdon Software has 7.3 percent coupon bonds on the market with
17 years to maturity. The bonds make semiannual payments and
currently sell for 92 percent of par.
What is the effective annual yield?
(Enter your answer as a percentage, omit the "%" sign in
your response, and enter your answer with two decimal places. For
example, 1.214% should be entered as 1.21.)

Skolits Corp. issued 15-year bonds 2 years ago at a coupon rate
of 8.8 percent. The bonds make semiannual payments. If these bonds
currently sell for 109 percent of par value, what is the YTM?
(Do not round intermediate calculations. Enter your answer
as a percent rounded to 2 decimal places, e.g.,
32.16.)
YTM
%

Ngata Corp. issued 18-year bonds 2 years ago at a coupon rate of
10.1 percent. The bonds make semiannual payments. If these bonds
currently sell for 100 percent of par value, the YTM is
percent.

Heginbotham Corp. issued 20-year bonds two years ago at a coupon
rate of 5.3 percent. The bonds make semiannual payments. If these
bonds currently sell for 105 percent of par value, what is the
YTM?

West Corp. issued 14-year bonds 2 years ago at a coupon rate of
9.8 percent. The bonds make semiannual payments. If these bonds
currently sell for 103 percent of par value, what is the YTM?

West Corp. issued 16-year bonds 2 years ago at a coupon rate of
9.7 percent. The bonds make semiannual payments. If these bonds
currently sell for 96 percent of par value, what is the YTM

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