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Contact [7]
4 years ago
9

Tangshan Industries has issued a bond which has a​ $1,000 par value and a 15 percent annual coupon interest rate. The bond will

mature in ten years and currently sells for​ $1,250. Using this​ information, the yield to maturity on the Tangshan Industries bond is​ ________. A. 11.39 percent B. 10.79 percent C. 13.29 percent D. 12.19 percent
Business
1 answer:
mina [271]4 years ago
6 0

Answer:

B. 10.79 percent

Explanation:

yield to maturity = [150 + (1250 - 1000/10)]/[(1250 + 1000/2)]

                            = 10.79%  

Therefore, The yield to maturity on the Tangshan Industries bond is 10.79%

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