Question

Problem 3-10 (LG 3-2) Calculate the yield to maturity on the following bonds a. A 8.9 percent coupon (paid semiannually) bond, with a $1,000 face value and 13 years remaining to maturity. The bond is selling at $930. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Yield to maturity % per year b. An 6 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $908. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Yield to maturity % per year c. An 8 percent coupon (paid annually) bond, with a $1,000 face value and 8 years remaining to maturity The bond is selling at $1,058. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Yield to maturity % per year

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

OND - Microsoft Excel (Product A File Home Insert Page Layout Formulas Data Review View Add-Ins - Cut Ea Copy AutoSum A A Wrap Text Calibri 11 General Fill A Merge & Center Conditional Format Insert Delete Format Paste S % Cell Sort & Find & BIU 2 Clear Format Painter ble Styles er Select Formatting Clipboard Font Alignment Number Shules Cells Editing C1 A C P G H K M N 1 2 SEMI ANNUAL COUPON BOND a 1000 4. FACE VALUE 5 COUPON 8.90% COUPON (S) 6 44.5 SEMI ANNUAL 13 7 YEARS NO OF PERIODS 26 930 PRICE 10 4.9336% [-RATE(C8,-C6,C9, -C4) 11 YTM YTM (ANNUAL) = 9.867% 12 13 14 15 16 17 18 19 Sheet5 Sheet6 Sheet7 Sheet8 Sheet9Sheet10 Sheet11 130 % LP, IP, MRP, INFLATION YIELD WARRANTrefund bond Sheet1 Sheet3 Sheet4 CLEAN INVOICE PRICE 4 H Re erences W 07:12 ENG 08-06-2019

OND - Microsoft Excel (Product A File Home Insert Page Layout Formulas Data Review View Add-Ins - Cut AutoSum A A Wrap Text Calibri 11 General Fill Copy Format Painter A Merge & Center Conditional Format Insert Delete Format Paste S % Cell Sort & Find & BIU 2 Clear ble Styles er Select Formatting Clipboard Font Alignment Number Shules Cells Editing C33 A C D P G H K M N 15 16 17 18 19 20 b QUARTERLY COUPON BOND 21 FACE VALUE 1000 COUPON 22 6.00% COUPON (S) 15 [QUARTERLY COUPON] 23 24 YEARS 10 40 25 NO OF PERIODS 908 26 PRICE 27 28 YTM 1.8261% [-RATE(C25,-C23,C26,-C21)] YTM (ANNUAL) = 7.305% [ 1.8261% X 4] 29 30 31 32 33 Sheet5 Sheet6 Sheet7 Sheet8 Sheet9Sheet10 Sheet11 130 % LP, IP, MRP, INFLATION YIELD WARRANTrefund bond Sheet1 Sheet3 Sheet4 14 H CLEAN INVOICE PRICE Re erences 07:12 ENG 08-06-2019

OND - Microsoft Excel (Product A File Home Insert Page Layout Formulas Data Review View Add-Ins - Cut AutoSum A A Wrap Text Calibri 11 General Fill Copy A Merge & Center Conditional Format Insert Delete Format Paste S % Cell Sort & Find & BIU 2 Clear Format Painter ble Styles er Select Formatting Clipboard Font Alignment Number Shules Cells Editing C50 A C D P G H K M N 32 33 34 35 36 C ANNUAL COUPON BOND 37 FACE VALUE 1000 38 COUPON 8.00% COUPON ($) 39 80 ANNUAL COUPON 40 YEARS 8 41 NO OF PERIODS 42 PRICE 1058 43 7.0276% [=RATE(C41,-C39, C42,-C37)] 44 YTM 45 YTM (ANNUAL) = 7.028% 46 47 48 49 50 Sheet5 Sheet6 Sheet7 Sheet8 Sheet9Sheet10 Sheet11 130 % LP, IP, MRP, INFLATION YIELD WARRANTrefund bond CLEAN INVOICE PRICE Sheet1 Sheet3 Sheet4 4 Re erences 07:13 ENG 8-06-2019