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STALIN [3.7K]
3 years ago
11

Qin Corp. issued 15-year bonds two years ago at a coupon rate of 5.1 percent. The bonds make semiannual payments. If these bonds

currently sell for 96 percent of par value, what is the YTM
Business
1 answer:
Rina8888 [55]3 years ago
8 0

Answer:

5.54 %

Explanation:

Most Bonds are expressed per $100. I will use this as the Face Value.

We can then calculate the Yield to Maturity (YTM) of the Bonds as follows :

<em>PV = ($100 x 96 %) = - $96</em>

<em>PMT = ($100 x 5.1 %) ÷ 2 = $2.55</em>

<em>N = (15 - 2) x 2 = 26</em>

<em>FV = $100</em>

<em>P/YR = 2</em>

<em>YTM = ??</em>

Using a Financial Calculator to input the values as above, we get a YTM of 5.54 %

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