Yield to Maturity
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7.9
Heymann Company bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 9 percent.
a. What is the yield to maturity at a current market price of (1) 829 or (2) $1,104?
b. Would you pay $829 for each bond if you thought that a "fair" market interest rate for such bonds was 12 percent---that is, if rd = 12 percent? explain your answer.
7.13 - Price and Yield
An 8 percent semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.21 percent. What are the bond's price and YTM?
**Please provide solution and explanation in Excel spreadsheet.
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