Explore BrainMass

Explore BrainMass

    Yield to maturity

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com March 4, 2021, 6:08 pm ad1c9bdddf

    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%


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

    Solution Summary

    The solution calculates Yield to maturity of a bond.