Question

Qin Corp. issued 15-year bonds two years ago at a coupon rate of 5.1 percent. The bonds make semiannual payments. If these bonds currently sell for 96 percent of par value, what is the YTM

Answer 1

5.54 %

Step-by-step explanation:

Most Bonds are expressed per $100. I will use this as the Face Value.

We can then calculate the Yield to Maturity (YTM) of the Bonds as follows :

PV = ($100 x 96 %) = - $96

PMT = ($100 x 5.1 %) ÷ 2 = $2.55

N = (15 - 2) x 2 = 26

FV = $100

P/YR = 2

YTM = ??

Using a Financial Calculator to input the values as above, we get a YTM of 5.54 %