Question
Lauren is looking to diversify her portfolio by investing in corporate bonds. She is analyzing a bond that was issued by Greshak Corp. several years
Lauren is looking to diversify her portfolio by investing in corporate bonds. She is analyzing a bond that was issued by Greshak Corp. several years ago. Greshak's bonds have 31 years remaining to maturity and each has a face value of $1,000.00. Assuming the bonds are currently priced at $910.50 in the market and have an interest coupon rate of 13.75% (paid semiannually), what is the Yield to Maturity (YTM) for each bond? USE OF THE APPROXIMATE YIELD FORMULA IS NOT APPROPRIATE. YOU MUST SOLVE FOR THE EXACT ANSWER USING A FINANCIAL CALCULATOR AND SHOW ALL OF YOUR WORK (KEYSTROKES) TO RECEIVE CREDIT (USE AT LEAST 4 DECIMAL PLACES).
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