In: Finance
Ezzell Enterprises’ noncallable bonds currently sell for $1,165. They have a 15-year maturity, an annual coupon of $95, and a par value of $1,000. What is their yield to maturity?
NPER = 15 (period of bonds)
PMT = 95 (annual interest payments)
PV = -1165 (current price of bonds)
FV = 1000 (par value of bonds)
Rate =indicates YTM
Yield to maturity (YTM) = Rate(NPER,PMT,PV,FV) = Rate(15,95,-1165,1000) = 7.62%
Their yield to maturity is 7.62%