Ngata Corp. issued 18-year bonds 2 years ago at a coupon rate of 9.5 percent. The bonds make semiannual payments. If these bonds
currently sell for 105 percent of par value, what is the YTM
1 answer:
Answer:
8.91%
Explanation:
In this question We applied the Rate formula which is presented in the attachment below:
Data given in the question
PMT = 1,000 × 9.5% ÷ 2 = $47.50
NPER = 18 years - 2 years × 2 = 32 years
Present value = $1000 × 105% = $1,050
Assuming figure - Future value = $1,000
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the yield to maturity is 8.91%
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