# Finance: Bond valuation.

Bond Valuation

a. Calculate the Yield-to-Maturity on a 8 year, 9 percent semi-annual coupon, $1,000 par value bond that sells for $921.11 What is the YTM if that bond now sells for $1,157.67?

b. What is the total return, the current yield, and capital gains yield for the DISCOUNT bond (i.e. $921.11)? (Assume the bond is held to maturity and the company does not default on the bond).

Â© BrainMass Inc. brainmass.com December 24, 2021, 9:41 pm ad1c9bdddfhttps://brainmass.com/business/bond-valuation/finance-bond-valuation-404194

## SOLUTION This solution is **FREE** courtesy of BrainMass!

The solution is presented in a Word document.

The solution is clear and concise.

Thank you.

BOND VALUATION

a. Calculate the Yield-to-Maturity on an 8 year, 9 percent semi-annual coupon, $1,000 par value bond that sells for $921.11. What is the YTM if that bond now sells for $1,157.67?

NOTE: Double click the table to see the formulas used.

b. What is the total return, the current yield, and capital gains yield for the DISCOUNT bond (i.e. $921.11)? (Assume the bond is held to maturity and the company does not default on the bond).

Â© BrainMass Inc. brainmass.com December 24, 2021, 9:41 pm ad1c9bdddf>https://brainmass.com/business/bond-valuation/finance-bond-valuation-404194