CFIN (with MindTap Finance, 1 term (6 months) Printed Access Card) (MindTap Course List)
6th Edition
ISBN: 9781337407342
Author: Scott Besley, Eugene Brigham
Publisher: Cengage Learning
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Chapter 11, Problem 7PROB
Summary Introduction
YTM is the yield to maturity. It is the rate earned by the investor if he holds the bond till maturity.
Calculate the YTM by using the following formula:
Where,
M is the par value or face value,
INT is the dollar interest payment,
N is the number of years of interest payment.
EE has outstanding bonds with interest payment is $20 in every 6 months, maturity 6 years, current price is $900. Compounding semiannual.
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