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    Calculating bond's yield to maturity

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    A corporate bond has a face value of $1,000, and pays a $50 coupon every six months (i.e., the bond has a 10 percent semiannual coupon). The bond matures in 12 years and sells at a price of $1,080. What is the bond's nominal yield to maturity

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    Solution Preview

    Please refer attached Excel file for better understanding of functions used.


    At the end
    of year Period No. Cash Flow
    0 0 -1080
    0.5 1 50
    1 2 50
    1.5 3 50
    2 ...

    Solution Summary

    Solution describes the steps in finding nominal YTM for a semi annunal coupon bond.