Need help with a finance homework question about percent coupon bonds

Business & Finance
Tutor: None Selected Time limit: 1 Day

The Timberlake-Jackson Wardrobe Co. has 11 percent coupon bonds on the market with nine years left to maturity. The bonds make annual payments.


Required:

If the bond currently sells for $1,139.59, what is its YTM?

Dec 19th, 2015

Thank you for the opportunity to help you with your question!

Assuming bond face value is $1000, C = 110

YTM = C + (F-P)/n divided by F+P /2

=110 + 1000-1139.59/ 9 divided by 1000+1139.59 /2

= 94.49 / 1069.8

  • = 8.83%

Please let me know if you need any clarification. I'm always happy to answer your questions.
Dec 19th, 2015

i think the answer is wrong

Dec 19th, 2015

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