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Ashburn Corporation issued 25-year bonds two years ago at a coupon rate of 5.6 percent. The bonds make semiannual payments. If these bonds currently sell for 97 percent of par value, what is the YTM

Respuesta :

jepessoa

Answer:

5.84%

Explanation:

years to maturity = 25 - 2 = 23

number of coupons left = 23 * 2 = 46

current price = $970

coupon = $28

We can use Excel and the IRR function to determine yield to maturity:

-970  

28  

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28 IRR:  

28 5.84%

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1028  

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