The Petit Chef Co. has 10.4 percent coupon bonds on the market with seven years left to maturity. The bonds make annual payments

Question

3 years ago

5

The Petit Chef Co. has 10.4 percent coupon bonds on the market with seven years left to maturity. The bonds make annual payments

and have a par value of $1,000. If the bonds currently sell for $1,119.34, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Business

1 answer:

Lunna [17] · Answer 1 · 2021-12-04T04:58:48+03:00

Answer:

8.10%

Explanation:

For computing the YTM we have to applied the RATE formula that is shown on the attachment

Data provided in the question

Present value = $1,119.34

Assuming figure - Future value or Face value = $1,000

PMT = 1,000 × 10.4% = $104

NPER = 7 years

The formula is shown below:

= Rate(NPER;PMT;-PV;FV;type)

The present value come in negative

So, after solving this, the YTM is 8.10%