Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, wh
ID: 2766692 • Letter: B
Question
Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which of course is also the amount of principal to be paid at maturity. The bonds are currently selling for $870. They have 10 years remaining to maturity. The annual interest payment is 9 percent ($90).
Compute the yield to maturity. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Compute the yield to maturity. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Explanation / Answer
Yieild to maturity is the irr of the cashflows
= par value =1000
=current price =870
Annnual interest =90
Now RATE(10,-90,870,-1000,0,0) = 11.23% which the yields to maturity
It is also the irr of cashflows