Question
A semiannual pay, noncallable, $1,000 par value, 5.25% coupon, 8-year bond is currently priced at 108.35 percent of par. What is the bonds yield to
A semiannual pay, noncallable, $1,000 par value, 5.25% coupon, 8-year bond is currently priced at 108.35 percent of par. What is the bonds yield to maturity.
N = 16 (8x2), i = ?, PV = -$1,083.50, PMT = $26.25 [(5.25%x$1,000)/2] FV = $1,000
4.02%
Remember to double the i due to semi-annual (2.009555836x2)
Can someone explain this to me? How did they get the answer of 4.02%? Also, can you please show your work and not do it on excel?
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Advanced Financial Accounting
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
6th edition
013703038X, 978-0137030385
