Question
yield to maturity-you are offered a 20year, 6% annual coupon bond with a face or par value of $1,000 at a price today, of $1,088.75.
yield to maturity-you are offered a 20year, 6% annual coupon bond with a face or par value of $1,000 at a price today, of $1,088.75. What rate of interest would you earn if you bought the bond and held it until maturity? That is, what is the YTM?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Formula YTM C F P n F P 2 100 where C Annual coupon payment 6 of 1000 60 F Face value of the bond ...
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Step: 2
Step: 3
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Financial Management Principles and Applications
Authors: Sheridan Titman, Arthur Keown, John Martin
12th edition
133423824, 978-0133423822
