Question
A corporate bond was quoted yesterday at 106 while today's quote is 104.5 at a constant yield to maturity. The bond has a face value
A corporate bond was quoted yesterday at 106 while today's quote is 104.5 at a constant yield to maturity. The bond has a face value of $1,000 and pays interest semi-annualy at an annual coupon rate of 10%.
What is the YTM on this bond?
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Solution The yield to maturity YTM of a bond is the expected rate of return that an investor will earn if they hold the bond until its maturity date assuming that all interest payments are reinvested ...
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Fundamentals Of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts, J. Ari Pandes, Thomas Holloway
10th Canadian Edition
1259654753, 9781259654756
