Ask Question
3 July, 22:31

ABC Company bonds are trading on the open market. These bonds mature in 10 years. The coupon rate on the ABC bonds are at 8.50%. The current price of the bonds is $1,062.50. What is the current yield to maturity of these bond

+1
Answers (1)
  1. 4 July, 01:54
    0
    7.59%

    Explanation:

    Using a financial calculator, input the following to calculate Yield to Maturity (YTM). I'm using Texas Instruments BA II Plus model.

    Face value of the bond; FV = 1000

    Annual coupon payment; PMT = Coupon rate * Face value;

    PMT = 8.5%*1000 = 85

    Present value of bond or price; PV = - 1062.50

    Time to maturity in years; N = 10

    then compute annual interest rate; CPT I/Y = 7.59%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “ABC Company bonds are trading on the open market. These bonds mature in 10 years. The coupon rate on the ABC bonds are at 8.50%. The ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers