Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which of course is also the amount of principal to
be paid at maturity. The bonds are currently selling for $690. They have 10 years remaining to maturity. The annual interest payment is 8 percent ($80). Compute the yield to maturity.
1 answer:
Answer:
14%
Explanation:
Data provided as per the question
Face value = $1,000
Present value = $690
Nper = 10
PMT = $80
The computation of yield to maturity. is shown below:-
YTM = Rate(Nper,PMT,PV,FV)
= Rate(10,80,690,1000)
= 14%
Therefore for computing the yield to maturity we simply applied the formula and put it into an excel sheet.
You might be interested in
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
