The corporation has issued a bond which has a P1,000 par value and a 15% annual coupon interest rate.  The bond will mature in ten years and currently sells for P1,250.  What is the yield to maturity of this bond using the approximation formula? a. 11.11%

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
icon
Related questions
Question
100%

The corporation has issued a bond which has a P1,000 par value and a 15% annual coupon interest rate.  The bond will mature in ten years and currently sells for P1,250.  What is the yield to maturity of this bond using the approximation formula?

a. 11.11%

b. 15%

c. 27.278%

d. 43.33%

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Rate Of Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Personal Finance
Personal Finance
Finance
ISBN:
9781337669214
Author:
GARMAN
Publisher:
Cengage