Purchase Solution

# Yield to maturity (YTM) and Yield to Call (YTC)

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B7. (Yield to maturity) Coca-Cola has a zero-coupon bond that will pay \$1,000 at maturity in five years. Today the bond is selling for \$790.09. What is the YTM?

B8. (Yield to maturity) J.C. Penney has a zero-coupon bond that will pay \$1,000 at maturity in 25 years. Today the bond is selling for \$98.24. What is its YTM?

B9. (Yield to call) Samsung has a bond that cannot be called today but can be called in four years at a call price of \$1,080. The bond has a remaining maturity of 16 years, has a coupon rate of 14%, and is currently selling for \$1,107.67. What is the bond's YTC?

##### Solution Summary

Calculates Yield to maturity (YTM) and Yield to Call (YTC).

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B7. (Yield to maturity) Coca-Cola has a zero-coupon bond that will pay \$1,000 at maturity in five years. Today the bond is selling for \$790.09. What is the YTM?
Current Price= \$790.09
Par Value ( payment at maturity)= \$1,000.00
Years to maturity= 5 years
This is a zero coupon bond and there is no other paymnt
YTM= 4.82% =(\$1,000./ \$790.09) ^ (1/5) -1

B8. (Yield to maturity) J.C. Penney has a zero-coupon bond that will pay \$1,000 at maturity in 25 years. Today the bond is ...

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