A July sales forecast projects that 7,300 units are going to be sold at a price of $11.80 per unit. The management forecasts 15%
1 answer:
You might be interested in
Answer:
When the bond is sale at premium, it means the market rate is lower than coupon rate. So investor purchase the bond a higher price until the bond yield equal the market rate
If sold at discount, the market rate is higher than coupon rate. This means it's sold below face value to increase the bond yield to market rate.
YTM if market price is 887 = 10.7366190%
YTM if market price is 1,134.2= 7.1764596%
Explanation:
For the YTM we can calculate an estimated using the following formula:
Where:
C= coupon payment 1,000 x 9% = 90
F= face value of the bonds = 1000
P= market price = 887
n= years to maturity = 10
YTM = 10.7366190%
C= 90
F= 1000
P= 1134.2
n= 10
YTM = 7.1764596%
A more precise answer can be achieve using excle or a financial calculator.