Charlotte's Clothing issued a 5 percent bond with a maturity date of 15 years. Five years have passed and the bond is selling for $690.
(a)What is the current yield?
(b) What id the yeild to maturity?
If five years later the yield to maturity is 10 percent, what will be the price of the bond?
Please refer attached file for better clarity of functions in MS Excel.
(a) What is the current yield?
Current Yield=Coupon interest/Po=7.25%
(b) What id the yield to maturity?
Number of coupon payments left=10
Maturity amount=Face ...
Solution describes the steps to calculate the current yield, YTM and price of a bond in the given case. Calculations are carried out with the help of suitable functions in MS Excel.