Yield Computation. What is the yield to maturity for a bond paying $45 semi-annually that has twelve years until maturity and sells for $975? Please use formula if possible.
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Yield Computation. What is the yield to maturity for a bond paying $45 semi-annually that has twelve years until maturity and sells for $975?
Please use formula if possible.
YTM is return generated from bond if it is held till bond’s maturity. YTM is also the rate which discounts benefits generated from Bonds to its fair market price.
Step by step
Solved in 2 steps
