I'm about 2% off when calculating YTM and YTC from what I'm supposed to be getting in excel. Here is the question: Thatcher Corporation's bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bond is $1,100. The bonds are callable in 5 years at a call price of $1,050. What is their yield to maturity? What is their yield to call? For the YTM I'm using the rate function in excel. Here is how it reads RATE(10, 80,-1100,100). I'm getting the answer of 6.6023% and I'm supposed to be getting 6.62% (according to the book. It's the same for the YTC. Here is how it reads RATE(5,80,-1100,1050). The answer I'm getting is 6.474% but I'm supposed to get 6.49%. We are not using Fair Value Bond with this problem. What am I doing wrong?
I'm about 2% off when calculating YTM and YTC from what I'm supposed to be getting in excel.
Here is the question:
Thatcher Corporation's bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bond is $1,100. The bonds are callable in 5 years at a call price of $1,050. What is their yield to maturity? What is their yield to call?
For the YTM I'm using the rate function in excel. Here is how it reads RATE(10, 80,-1100,100). I'm getting the answer of 6.6023% and I'm supposed to be getting 6.62% (according to the book.
It's the same for the YTC. Here is how it reads RATE(5,80,-1100,1050). The answer I'm getting is 6.474% but I'm supposed to get 6.49%.
We are not using Fair
What am I doing wrong?
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