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snow_tiger [21]
3 years ago
9

Adams Enterprises’ noncallable bonds currently sell for $1,120. They have a 15-year maturity, an annual coupon of $85, and a par

value of $1,000. What is their yield to maturity? 5.84% 6.15% 6.47% 6.81% 7.17%
Business
1 answer:
poizon [28]3 years ago
3 0

Answer: 7.17%

Explanation:

Given,

YTM = ?

Annual Coupon, C = $85

Par Value, F = $1000

Current Bond Price, p = $1120

Maturity Year, n = 15

The yield to maturity is 7.17% from the data given in the question above. We will use the yield to maturity formula which stated as YTM = C + [(F-P)/n] / [(F+P)/2] where YTM is the yield to maturity,

C is the annual coupon,

F is the par value,

p is the current bond price, and

n is the maturity year.

YTM = 85 + [(1000-1120)/15] / [(1000+1120)/2]

YTM = 7.17%

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Walters manufactures a specialty food product that can currently be sold for $21.20 per unit and has 19,200 units on hand. Alter
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The incremental net income would be $37,760.

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