YTM

Related BrainMass Solutions

• Bonds : Yield to Maturity

  Therefore, the bond is selling at Premium and the YTM is significantly lower than 10%. (b.) Bonds and YTM are investigated.

• Current bond price, YTM, coupon rate, real rate of interest

  Use the RATE function to calculate YTM Annual interest 90 Par Value 1000 Prcie 934 Maturity 9 years YTM 10.15% Ashes Divide Corporation has bonds on the market with 14.5 years to maturity, a YTM of 6.8 percent, and a current

• Calculating current yield, YTM and effective annual yield

  What is the YTM?  YTM can be found by using Rate function in MS Excel YTM=4.30% This is semi annual YTM Nominal YTM=8.59% c. What is the effective annual yield? 

• Calculation of the yield to maturity for bonds

  of 900 with coupon of 50 per year we will have following equation 900 = 50/(1+YTM)+50/(1+YTM)^2+50/(1+YTM)^3 +1000/(1+YTM)^3 We start with a guess value of YTM say 10%and calculate the right hand side(RHS) value.

• Bond Yields and Valuation: Compute effective annual yield; coupon rate for new bonds

  We use the RATE function in excel to calculate the YTM. The semi annual YTM comes to 3.89% and the annualized YTM is 7.77%. Since the interest is paid semi annually, the effective YTM will take into effect the semi annual compounding.

• Yield to Call (YTC) and Yield to Maturity (YTM) of bonds

  Substitute as = RATE(4,21.875,-853.75,1000) to get the semi-annual YTM as 6.45% YTM on annual basis = 6.45% * 2 = 12.90% (answer) The solution shows the method to compute the YTC and YTM of bonds.

• Yield to Maturity Comparison

  Compare this yield to the YTM when you first bought the bond. Why are they different? Assume interest payments are reinvested at the original YTM.

• Difference between this bond's YTM and its YTC

  What is the difference between this bond's YTM and its YTC? (Subtract the YTC from the YTM.) a. 2.11% b. 2.32% c. 2.55% d. 2.80% e. 3.09% The YTM and YTC can be calculated using the RATE function in excel. The YTM comes to 8.91%.

• Calculating YTM for the Given Bond

  YTM= 4.23% =RATE(E3,E4,E2,E1,E5) Annual YTM=2*YTM= 8.46% Annual YTM is less than required rate of return (9%).

• Bond valuation, Yield to maturity

  Price=$1000 / (1+YTM)^t Or $300=$1000 / (1+YTM)^30 or (1+YTM) = ($1000/$300)^ (1/30)= 1.0409 or YTM= 0.0409 =1.0409-1 Answer: YTM= 0.0409 or 4.09% b.