Watters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 8.8

Question

Watters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 8.8 percent. The bonds make semiannual payments. If these bonds currently sell for 106 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Watters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 8.8 percent. The bonds make semiannual payments. If these bonds currently sell for 106 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Explanation / Answer

YTM = { Int fo 6 months + [(MV-Bo)/n*2] } / [(MV+Bo)/2]

YTM = { 44 + [(1000-1060)/26]} / [(1000+1060)/2]

YTM = 4% is semi annual

So YTM p.a = 8%

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.