Explore BrainMass

Explore BrainMass

    Bonds-Yield to Maturity, Effective Annual Yield

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com June 3, 2020, 6:17 pm ad1c9bdddf

    Solution Summary

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