Abner Corporation's bonds mature in 21 years and pay 13 percent interest annually. If you purchase the bonds for $850 what is your yield to maturity? Question 7-8
Annual coupon=1000*13%=130
Approx Yield to maturity=[Annual coupon+(Face value-Present value)/time to maturity]/(Face value+Present value)/2
=[130+(1000-850)/21]/(1000+850)/2
which is equal to
=15.43%(Approx).
Abner Corporation's bonds mature in 21 years and pay 13 percent interest annually. If you purchase...
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