Question

the bonds issued by jordache jewelers bear a 7.5 percent coupon, payable semiannually. the bonds mature in 13 years and have a $1,000 face value. currently, the bonds sell at par. what is the yield to maturity? 7.33 percent 7.41 percent 7.46 percent 7.50 percent 7.67 percent

Answer 1

The yield to maturity for Jordache Jewelers' bonds which carry a 7.5 percent coupon and sell at par is also 7.5 percent since they sell for their face value and there is no capital gain or loss involved.

Step-by-step explanation:

If the bonds issued by Jordache Jewelers bear a 7.5 percent coupon, payable semiannually, and currently sell at par (face value of $1,000), the yield to maturity (YTM) is equal to the coupon rate, given that there are no capital gains or losses when a bond is sold at par. Therefore, the YTM for these bonds that mature in 13 years is 7.5 percent, provided there are no additional costs or factors impacting the yield.