Workman Software has 10.8 percent coupon bonds on the market with 6 years to maturity. The...

Workman Software has 10.8 percent coupon bonds on the market with 6 years to maturity. The bonds make semiannual payments and currently sell for 115.8 percent of par. a. What is the current yield on the bonds? • 9.79% • 0.19% • 9.33% • 10.29% b. The YTM? • 7.67% • 3.74% • 7.49% • 11.30% c. The effective annual yield? • 8.01% • 0.09% • 7.63% • 7.46%

Solutions

Expert Solution

Current yield=10.8%/115.8%=9.32642%

Effective annual yield=(1+RATE(6*2,10.8%*1000/2,-115.8%*1000,1000))^2-1=7.62323%

jeff jeffy answered 2 years ago

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