Question

The Petit Chef Co. has 10.8 percent coupon bonds on the market with eight years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,129.70, what is the YTM? g

Answer 1

The yield to maturity is 8.50%

Step-by-step explanation:

The computation of the yield to maturity is shown below:

Given that

NPER = 8

PMT = $1,000 × 10.8% = $108

PV = $1,129.70

FV = $1,000

The formula is shown below:

= RATE(NPER,PMT,-PV,fV)

After applying the above formula, the yield to maturity is 8.50%

And, the same is to be considered

hence, the yield to maturity is 8.50%