A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par value. The bond has a coupon rate of 5.2 percent paid annually and matures in 14 years. What is the yield to maturity of this bond (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)

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15 March, 17:46

A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par value. The bond has a coupon rate of 5.2 percent paid annually and matures in 14 years. What is the yield to maturity of this bond (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)

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Shaggy · Answer 1

5.91%

Explanation:

The formula to compute the yield to maturity is shown below:

Yield to Maturity = Interest Payment + Face Value - Price : years to maturity : Face Value + Price : 2

where

Interest payment = 5.2% * ¥100,000 = ¥5,200

Price = 93% * ¥100,000

= ¥93,000

Years to Maturity = 14 Years

So,

Yield to Maturity = ¥5,200 + ¥100,000 - ¥93,000 : 14 : ¥100,000 + ¥93000 : 2

= ¥5,700 : ¥96,500

= 5.91%