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
Face Value of bond=Maturity Value=FV= 1000
Market price of bond=PV= -950 cash outflow
Number of ...
Solution depicts the steps to estimate YTM in the given case.