Answer:
the yield to maturity for the bond issued by Xenon, Inc = 6.92%
Explanation:
<em>IMPORTANT NOTE: The data of the calculation was obtained from an online book.</em>
<em />
Yield to Maturity [YTM] of the Bond
Yield to Maturity [YTM] = Coupon Amount + [(Par Value – Bond Price) / Maturity Years] / [(Par Value + Bond Price)/2]
Par Value = $2,000
Coupon Amount = $126 [$2,000 x 6.30%]
Bond Price = $1,885.82 [$2,000 x 94.291%]
Maturity Years = 15 Years [Jan 15,2016 to Jan 15,2031]
Therefore, Yield to Maturity [YTM] = Coupon Amount + [(Par Value – Bond Price) / Maturity Years] / [(Par Value + Bond Price)/2]
= [$126 + {($2,000 – $1,885.82) / 15 Years)] / [($2,000 + $1,885.82) / 2}]
= [($126 + $7.61) / $ 1,942.91]
= 0.0692
= 6.92%
<h2>
</h2><h2>Therefore, the yield to maturity for the bond issued by Xenon, Inc = 6.92%</h2>
