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    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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    https://brainmass.com/business/bond-valuation/yield-to-maturity-31357

    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%

    Answer: = 12.00%

    Check:

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

    Solution Summary

    The solution calculates Yield to maturity of a bond.

    $2.49

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