Ask Question
13 November, 19:53

Jenny LePlaz is looking to invest in a five-year bond that pays annual coupons of 6.25 percent and currently sells at $912.34. What is the current market yield on such bonds?

+3
Answers (1)
  1. 13 November, 20:15
    0
    8.47%

    Explanation:

    annual coupon = 6.25% x $1,000 = $62.50

    present value = - $912.34

    cash flow 0 = - $912.34

    cash flow 1 = $62.50

    cash flow 2 = $62.50

    cash flow 3 = $62.50

    cash flow 4 = $62.50

    cash flow 5 = $1,062.50

    using an excel spreadsheet and the IRR function we can determine the yield to maturity = 8.47%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Jenny LePlaz is looking to invest in a five-year bond that pays annual coupons of 6.25 percent and currently sells at $912.34. What is the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers