EBK CFIN
5th Edition
ISBN: 9781305888036
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 6, Problem 11PROB
Summary Introduction
Bond SC has a face value of $1,000 and an annual interest rate of 9% paid semi-annually, it matures in 4 years with current market price of a) 851 and b) 1105.
Yield to maturity (YTM) of a bond is the required
YTM calculation is a trial and error process, however, we can calculate YTM using a financial calculator as follows:
INT = PMT = coupon amount
FV = M = maturity value
PV = Price of the bond (input as a negative value)
N = number of periods
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