Use the information for the question(s) below.
-The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in five years. The bond certificate indicates that the stated coupon rate for this bond is 8.5% and that the coupon payments are to be made semiannually. Assuming that this bond trades for $1081.73, then the YTM for this bond is closest to ________.
A) 5.2%
B) 7.87%
C) 6.56%
D) 9.18%

Question

Use the information for the question(s) below. 
-The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in five years. The bond certificate indicates that the stated coupon rate for this bond is 8.5% and that the coupon payments are to be made semiannually. Assuming that this bond trades for $1081.73, then the YTM for this bond is closest to ________.
A) 5.2% 
B) 7.87% 
C) 6.56% 
D) 9.18%

Quizplus · Accepted Answer

C) FV = $1000
PMT = $42.50 ($85 / 2)
N = 10 (5 × 2)
PV = -$1081.73
Compute I = 3.2783 × 2 = 6.5565%.

Use the Information for the Question(s) Below