Footsteps Co. has a bond outstanding with a coupon rate of 5.9 percent and annua

Question

Footsteps Co. has a bond outstanding with a coupon rate of 5.9 percent and annual payments. The bond currently sells for $984.29 matures in 23 years and has a par value of $1000 what is the Ytm of the Footsteps Co. has a bond outstanding with a coupon rate of 5.9 percent and annual payments. The bond currently sells for $984.29 matures in 23 years and has a par value of $1000 what is the Ytm of the Footsteps Co. has a bond outstanding with a coupon rate of 5.9 percent and annual payments. The bond currently sells for $984.29 matures in 23 years and has a par value of $1000 what is the Ytm of the

Explanation / Answer

YTM is the yield an investor earns if it holds investment untill maturity. YTM = Average Income / Average Investments Where, = (C+(F-P)/n)/((F+P)/2) C $       1,000 x 5.90% = $    59.00 = (59+(1000-984.29)/23)/((1000+984.29)/2) F $       1,000 = 6.02% P $     984.29 n 23

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