Nico Corp issued bonds bearing a coupon rate of 12 percent, pay coupons semiannually, have 3 years remaining to maturity, and are currently priced at $940 per bond. What is the yield to maturity?

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) is calculated using the bond's current price, coupon payments, and time to maturity. Given the bond's price of $940, a coupon rate of 12% (resulting in $60 semiannual payments), and 3 years to maturity, the YTM is approximately 14.54% when calculated using the present value formula for bonds.

Nico Corp Issued Bonds Bearing a Coupon Rate of 12