Question

One of P&G's bonds is an annual pay, fixed-coupon bond with a 5% coupon rate, and 15 years left to maturity. If the bond is sold at 123% of par value, What is yield to maturity of the bond? Note that the price is % of par value. For example, 120% suggests, $1,200 price $1,000 par value bond (or $120 price for $100 par value).

P&G has semiannual coupon bonds with a 5% coupon rate and 12 years remaining to maturity. The bonds are selling for 70% of par value. What is the (Annual) Yield of maturity of the bonds? Note that the price is % of par value. For example, 120% suggest $1,200 price of $1,000 par value (or $120 price for $100 par value)

Answer 1

1-	YTM On Bond =Using rate function in MS excel	rate(nper,pmt,pv,fv,type)	nper =15 pmt =1000*5% =50 pv =1000*123% =1230 fv =1000 type =0	RATE(15,-50,1230,-1000,0)	3.06%
2-	YTM On Bond -semi annual =Using rate function in MS excel	rate(nper,pmt,pv,fv,type)	nper =12*2 =24 pmt =1000*2.5% =25 pv =1000*70% =700 fv =1000 type =0	RATE(24,-25,700,-1000,0)	4.59%
	YTM -Annual	semiannual YTM*2	4.59*2		9.18