Question

footsteps Co. has a bond oustanding with a coupon rate of 5.2% and annual payments. The bond currently 1,012.50 matures in 16 years and has a par value of 1,000. What is the YTM of the bond

Answer 1

Answer:

the yield to maturity is 5.08%

Explanation:

The computation of the YTM of the bond is shown below:

Given that

NPER = 16 years

PMT = $1,000 × 5.2% = $52

PV = $1,012.50

FV = $1,000

The formula is shown below:

= RATE(NPER,PMT,-PV,FV,type)

After applying the above formula, the yield to maturity is 5.08%

Hence, the yield to maturity is 5.08%