Share
Explore BrainMass

Bonds-Yield to Maturity, Effective Annual Yield

ABC Industries bond has a 10 percent coupon rate and a $1000 face value. Interest is paid semiannually, and the bond has 20 years to maturity. If investors require a 12 percent yield, what is the bond's value? What is the effective annual yield on the bond?

XYZ corp. bond carries an 8 percent coupon, paid semiannually. The par value is $1000 and the bond matures in six years. If the bond currently sells for $911.37, what is its yield to maturity? What is the effective annual yield?

Solution Summary

The Price, Yield to maturity and Effective Annual Yield for semiannual bonds are calculated

$2.19