Carla Vista Corp. management plans to issue seven-year zero coupon bonds. It has learned that these bonds will sell today at a price of $442.66. Assuming annual coupon payments, what is the yield to maturity on these bonds? Assume face value is $1,000. (Round answe to 3 decimal places, e.g. 15.251%.) Yield to maturity H %

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.