The ABC Wardrobe Co. has 10.7 percent coupon bonds on the market with eleven years left...

The ABC Wardrobe Co. has 10.7 percent coupon bonds on the market with eleven years left to maturity. The bonds make semiannual payments and have a par value of $1000. If the bonds currently sell for $1,161.06, what is the YTM

Expert Solution

Yield to maturity of (YTM) of the Bond

The Yield to maturity of (YTM) of the Bond is calculated using financial calculator as follows (Normally, the YTM is calculated either using EXCEL Functions or by using Financial Calculator)


Variables	Financial Calculator Keys	Figure

Face Value [$1,000]	FV	1,000
Coupon Amount [$1,000 x 10.70% x ½]	PMT	53.50
Yield to Maturity [YTM]	1/Y	?
Time to Maturity [11 Years x 2]	N	22
Bond Price [-$1,161.06]	PV	-1,161.06

We need to set the above figures into the financial calculator to find out the Yield to Maturity of the Bond. After entering the above keys in the financial calculator, we get the semi-annual yield to maturity (YTM) on the bond = 4.215%

The semi-annual Yield to maturity = 4.215%

Therefore, the annual Yield to Maturity = 8.43% [4.215% x 2]

“Hence, the Yield to maturity of (YTM) of the Bond will be 8.43%”

jeff jeffy answered 1 year ago

The Timberlake-Jackson Wardrobe Co. has 11.1 percent coupon bonds on the market with ten years left...

The Timberlake-Jackson Wardrobe Co. has 11.1 percent coupon bonds on the market with ten years left to maturity. The bonds make annual payments. Required: If the bond currently sells for $1,148.91, what is its YTM? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

The Painted Pin Co. has 11 percent coupon bonds on the market with nine years left...

The Painted Pin Co. has 11 percent coupon bonds on the market with nine years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,139.59, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to Maturity __?___%

2. a.Linebacker Co. has 7 percent coupon bonds on the market with 9 years left to...

2. a.Linebacker Co. has 7 percent coupon bonds on the market with 9 years left to maturity. The bonds make annual payments. If the bond currently sells for $1,080, what is its YTM? b.Caribbean Reef Software has 8.4 percent coupon bonds on the market with 9 years to maturity. The bonds make semiannual payments and currently sell for 95.5 percent of par. What is the YTM? c.Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity,...

Ackerman Co. has 10 percent coupon bonds on the market with nine years left to maturity....

Ackerman Co. has 10 percent coupon bonds on the market with nine years left to maturity. The bonds make annual payments. If the bond currently sells for $965.16, what is its YTM? Assume a par value of $1,000 0.62% 9.39% 10.23% 9.74% 11.39% Kiss the Sky Enterprises has bonds on the market making annual payments, with 9 years to maturity, and selling for $780. At this price, the bonds yield 7.2 percent. What must the coupon rate be on the...

Staind, Inc., has 6 percent coupon bonds on the market that have 6 years left to...

Staind, Inc., has 6 percent coupon bonds on the market that have 6 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 11 percent, what is the current bond price? $827.90 $749.05 $788.47 $1,249.87 $1,030.00

1. Lycan, Inc., has 8.7 percent coupon bonds on the market that have 10 years left...

1. Lycan, Inc., has 8.7 percent coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 10.7 percent, what is the current bond price? (Show your work. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 2. The Timberlake-Jackson Wardrobe Co. has 11.8 percent coupon bonds on the market with eight years left...

1a. Staind, Inc., has 7 percent coupon bonds on the market that have 15 years left...

1a. Staind, Inc., has 7 percent coupon bonds on the market that have 15 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 10 percent, what is the current bond price? (note: when the face value is not given for a bond, assume it is $1,000) 1b. Ackerman Co. has 7 percent coupon bonds on the market with ten years left to maturity. The bonds make annual payments. If the bond currently sells...

Staind, Inchas 7 percent coupon bonds on market that have 5 years left to maturity.The bonds...

Staind, Inchas 7 percent coupon bonds on market that have 5 years left to maturity.The bonds make annual payments. If YTM on these bonds is 10 percent, what is current bond price? $930.59 $841.96 $1,127.01 $1,030.00 $886.28 You sell short 200 shares of Microsoft that are currently selling at $50 per share. You post the 40% margin required on the short sale. If you earn no interest on the funds in your margin account, what will be your rate of...

Vulcan, Inc., has 8 percent coupon bonds on the market that have 8 years left to maturity. The bonds make annual pay...

Vulcan, Inc., has 8 percent coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 10 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

ABC Co. issued 1 million 6 percent annual coupon bonds that mature in 10 years. The...

ABC Co. issued 1 million 6 percent annual coupon bonds that mature in 10 years. The face value is $1,000 per bond. What are the expected cash flows from one of these bonds?

Question