Yield to maturity
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A firm has just issued $1,000 face value bonds with an annual coupon rate of 8%, paid semi-annually, and a maturity of 10 years. If the issue price for this is $770.6 what is the yield-to-maturity, stated annually?
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Solution Summary
The solution calculates Yield to maturity of a bond.
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The yield to maturity can be calculated by trial and error method or by using Excel function RATE
Yield to maturity= 6.00% semi annualy
Stated annually= 12.00%
Answer: = 12.00%
Check:
PVIFA( n, r%)= =[1-1/(1+r%)^n]/r%
PVIF( n, ...
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