SWH Corporation issued bonds on January 1,2004.The bonds had a coupon rate of 5.5%,with interest paid semiannually.The face value of the bonds is $1,000 and the bonds mature on January 1,2019.What is the yield to maturity for an SWH Corporation bond on January 1,2010 if the market price of the bond on that date is $950?

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) is calculated based on the bond's current market price, its face value, the coupon interest payments, and the time remaining until maturity. Given the bond's market price of $950, a coupon rate of 5.5%, and 9 years remaining until maturity, the YTM is approximately 6.23%.

SWH Corporation Issued Bonds on January 1,2004