In: Finance
The Brownstone Corporation's bonds have 4 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%.
When market price is 880 | ||||
1- | YTM on bond = Using rate function in MS excel | rate(nper,pmt,pv,fv,type) nper = 4 pmt =1000*10%=100 pv = 880 fv =1000 type =0 | RATE(4,-100,880,-1000,0) | 14.13% |
When the bond price is 1129 | ||||
2- | YTM on bond = Using rate function in MS excel | rate(nper,pmt,pv,fv,type) nper = 4 pmt =1000*10%=100 pv = 1129 fv =1000 type =0 | RATE(4,-100,1129,-1000,0) | 6.26% |