Question

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.)

Answer #1

We have provided with the following information:

Future value= $1,000

Time= 18 years*2= 36 semi-annual periods

Coupon rate= 6.70%/2= 3.35%.

Coupon payment= 0.0335*1,000= $33.50

Present value= 105%*1000= $1,050

The yield to maturity is calculated with the help of a financial calculator.

The below has to be entered in the financial calculator:

FV= 1,000; PV= -1,050; N= 36; PMT= 33.50

Press CPT and I/Y to calculate the yield to maturity.

The yield to maturity is 3.12% per semi-annual period and
3.1170*2= **6.23 percent** annually.

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.)

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 effective annual yield? (round 2 decimal places)

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.)

Workman software has 9.6 percent coupon bonds on the market with
18 years to maturity. The bonds make semiannual payments and
currently sell for 123.3 percent of par.
a. what is the current yield on the bonds?
b. The YTM?
c. The effective annual yield?

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11 years to maturity. The bonds make semiannual payments and
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Chamberlain Co. wants to issue new 20-year bonds for some
much-needed expansion projects. The company currently has 5 percent
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company set on its new bonds if it wants them to sell at par?
(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...

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your response, and enter your answer with two decimal places. For
example, 1.214% should be entered as 1.21.)

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a.
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b.
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c.
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