McDonalds Corporation has 8 percent coupon bonds on the market with 9 years left to maturity. The bonds make annual payment. If the bond currently sells for $910.85, what is the yield to maturity? Is the bond selling at a discount or premium?
The Yield to Maturity (YTM) is the discount rate that will make the present value of interest and principal equal to the price today. The annual interest is $80, maturity is 9 ...
The solution explains the calculation of yield to maturity of a bond.