Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 7.25% APR....
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Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 7.25% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and were issued at par value. Cinqua Terra bonds currently trade at $1,080.00. Given your answer to the 6-month return, what is the yield to maturity (as an EAR) for holding the bond? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) Hide Hint Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 7.25% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and were issued at par value. Cinqua Terra bonds currently trade at $1,135. Given your answer to part A, what is the yield to maturity (as an EAR) for holding the bond? SOLUTION: y = (1+ APR)-1= (1+ y)-1= (1.0247)-1 y = 0.0501 5.01% Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 7.25% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and were issued at par value. Cinqua Terra bonds currently trade at $1,080.00. Given your answer to the 6-month return, what is the yield to maturity (as an EAR) for holding the bond? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) Hide Hint Cinqua Terra Incorporated issued 10-year bonds three years ago with a coupon rate of 7.25% APR. The bonds pay semi-annual coupons, have a face value of $1,000 each and were issued at par value. Cinqua Terra bonds currently trade at $1,135. Given your answer to part A, what is the yield to maturity (as an EAR) for holding the bond? SOLUTION: y = (1+ APR)-1= (1+ y)-1= (1.0247)-1 y = 0.0501 5.01%
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To calculate the yield to maturity YTM for holding the bond we can use the formula FP 2 C YTM T FP ... View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Posted Date:
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