Answered

Welcome to Westonci.ca, the Q&A platform where your questions are met with detailed answers from experienced experts. Ask your questions and receive precise answers from experienced professionals across different disciplines. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

Sommers Co.'s bonds currently sell for $1,080 and have a par value of $1,000. They pay a $100 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,125. What is their yield to maturity (YTM)

Sagot :

abiolataiwo2015

Answer:

9.01%

Explanation:

Calculation to determine their yield to maturity (YTM)

We would be using financial calculation to determine their yield to maturity (YTM)

N =15 years

PV=$1,080

PMT=$100

FV=$1,000

Hence,

I/YR=YTM=9.01%

Therefore their yield to maturity (YTM) is 9.01%

Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.