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    Bond Yield to Maturity and Price

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    Jones Gas Company has $1,000 par value bonds outstanding at 10 percent interest. The market price of the bond was $534.45. Your broker explained that this was due to the low par to value yield calculation of 22.3%. The bonds will mature in 25 years. Compute the current price of the bonds if the present yield to maturity is 7%.

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    Bond Yield to Maturity
    Jones Gas Company has $1,000 par value bonds outstanding at 10 percent interest. The market price of the bond was $534.45. Your broker explained that this was due to the low par to value yield calculation ...

    Solution Summary

    This solution is comprised of a detailed explanation to compute the current price of the bonds if the present yield to maturity is 7%.

    $2.19

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