Explore BrainMass

Explore BrainMass

    Calculating YTM for the Given Bond

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

    Assume that a Ford bond has a maturity of 30 years. The bond has a face value of $1,000 and a coupon rate of 8% paid semi-annually. The present market price for the bond is $950. Assume your required rate of return on the bond is 9%, given your other opportunities and your appetite for risk. Calculate the return (yield-to-maturity) on the bond.

    © BrainMass Inc. brainmass.com October 10, 2019, 7:19 am ad1c9bdddf

    Solution Preview

    Face Value of bond=Maturity Value=FV= 1000
    Market price of bond=PV= -950 cash outflow
    Number of ...

    Solution Summary

    Solution depicts the steps to estimate YTM in the given case.