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Stewart County School District is about to raise funds for a newschool through a bond...
Stewart County School District is about to raise funds for a new school through a bond issue. The plan is to raise $3,475,000 with a 3.15% coupon, 12-year bond. The underwriter indicates the bonds will be sold at a price of $100.65 per $100. The yield to maturity on the bond is:
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Expert Solution
Bond price=100.65
Coupon amount=3.15
Bond face value=100
YTM can be calculated using the '=IRR' function in excel as shown below.
| Year | Cash flow |
| 1 | -100.65 |
| 2 | 3.15 |
| 3 | 3.15 |
| 4 | 3.15 |
| 5 | 3.15 |
| 6 | 3.15 |
| 7 | 3.15 |
| 8 | 3.15 |
| 9 | 3.15 |
| 10 | 3.15 |
| 11 | 3.15 |
| 12 | 103.15 |
| YTM | 3.08% |
Showing formula:
jeff jeffy answered 3 years agoRelated Solutions
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