Purchase Solution

# 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?

##### Solution Summary

The solution calculates Yield to maturity of a bond.

##### Solution Preview

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%

Check:

PVIFA( n, r%)= =[1-1/(1+r%)^n]/r%
PVIF( n, ...

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