What is the yield to maturity for a Pep Boys zero-coupon bond that matures in 14...
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What is the yield to maturity for a Pep Boys zero-coupon bond that matures in 14 years if the bond is selling for $530.00?
A. 5.84%
B. 4.64%
C. 4.28%
D. 5.49%
Homework Answers
The yield to maturity = [(Face Value / Present Value) ^ ( 1/ time) ] - 1
=[( $ 1000 / 530) ^ ( 1/14)] - 1
= 4.64%
Hence the correct answer is B. 4.64%
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