Rolling Company bonds have a coupon rate of 4.60 percent, 17 years to maturity,

Question

Rolling Company bonds have a coupon rate of 4.60 percent, 17 years to maturity, and a current price of $1,116. What is the YTM? The current yield?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

(ANSWER IS NOT -.21% OR .412 FOR EITHER)

Rolling Company bonds have a coupon rate of 4.60 percent, 17 years to maturity, and a current price of $1,116. What is the YTM? The current yield?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Explanation / Answer

YTM = (C + (F - P)/n) / ( F + P) /2 P = 1116 F = `1000 n = 17 C = 4.6% of 1000 = 46 YTM = (46 + ( 1000 - 1116)/17))/(1000+1116)/2           = ( 46 -6.82)/ 1058           = 39.18/1058            = 3.7% Current yeild = Annual Coupon / Current Bond Price                             = 46 / 1116                              = 4.12%

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

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