Your firm has just issued a 20-year $1,000.00 par value,6% coupon semiannual bond for a net price of $964.00.What is the yield to maturity? Use a financial calculator to determine your answer.

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) can be calculated using a financial calculator by inputting the following: N=40 (20 years * 2), PV=-964, PMT=30 (6% of $1,000/2), FV=1000. Solving for I/Y gives approximately 3.16% per period, or 6.32% annually.

Your Firm Has Just Issued a 20-Year $1,000