Question
In: Finance
Abner Corporation's bonds mature in 23 years and pay 9 percent interest annually. If you purchase...
Abner Corporation's bonds mature in 23 years and pay 9 percent interest annually. If you purchase the bonds for $1,125, what is your yield to maturity?
Solutions
Expert Solution
The yield to maturity of the bond can be calculated with the help of RATE function of Excel
Inputs requied:
N = 23
FV = 1000
PMT= 9%/2 * 1000 = 45
PV = 1125
The Rate function is:
=RATE(23,45,-1125,1000,0,0.11)
= 3.6847%
YTM = 3.68%
jeff jeffy answered 2 years agoRelated Solutions
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