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A 9% coupon, bond with fourteen years remaining to maturity is selling now at par.  Its yield...

A 9% coupon, bond with fourteen years remaining to maturity is selling now at par.  Its yield to maturity (YTM)?

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Answer #1

Answer:

Face Value = $1,000

Current Price = $1,000

Annual Coupon Rate = 9%

Current Price of the bond is equal to par value of the bond, therefore its YTM is equal to the coupon rate of the Bond.

Annual Yield to Maturity = Annual Coupon Rate
Annual Yield to Maturity = 9%

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