Stone Sour Corp. issued 20-years ago at a coupon rate of 7.1 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM?© BrainMass Inc. brainmass.com June 4, 2020, 3:35 am ad1c9bdddf
These instructions are for using a financial calculator HP 10BII. If you are using another financial calculator, you should adjust the inputs accordingly. Input the values into the financial functions of the calculator as follows.
N = (2)(20) = 40 (time to maturity with semiannual payments equals 40 6-month periods)
PV = (105%)(1000) = -$1050 ...
This solution shows how to calculate the yield to maturity on a bond with semiannual payments using a financial calculator.