Question
Compare the yield to maturity (YTM) of bonds issued by Amazon and Microsoft. The table below shows the bond details and YTM calculation for both
Compare the yield to maturity (YTM) of bonds issued by Amazon and Microsoft. The table below shows the bond details and YTM calculation for both companies' bonds:
Company | Face Value | Coupon Rate (%) | Maturity Period (Years) | Current Market Price | Yield to Maturity (%) |
Amazon | $10,000,000 | 5 | 10 | $9,500,000 | |
Microsoft | $8,000,000 | 4 | 8 | $7,500,000 |
Calculate the YTM for each bond and discuss how it reflects market perceptions of risk and return.
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Financial Accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
IFRS 3rd edition
1118978080, 978-1119153726, 1119153727, 978-1119153702, 978-1118978085
