A 5% semiannual coupon bond maturing in 5 years with a par value of $100 is trading at $95. 

Calculate the yield to maturity. 

2.A company is selling an equipment after four years for $37,249. The equipment was originally purchased for $88,575. The tax rate is 12%.The equipment is classified as a 5-year property. 

What is the after-tax salvage value?

The MACRS allowance percentages are as follows, starting with Year 1: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent.

3.ABC, Inc., has a beta of 1.19. The risk-free rate is 2.91% and the market risk premium is 7.89%.

 What is the required rate of return on ABC's stock?

4.ABC Inc. recently issued $1,000 par bonds at a 2.1% coupon rate. If the bonds have 20 years to maturity and a YTM of 16.94%.

 What is the current price of the bond? Assume semi-annual compounding.

Answer rating: 100% (QA)

To calculate the yield to maturity YTM of a bond we need to use the present value formula and solve for the discount rate YTM that equates the present value of the bonds cash flows to its current mark... View the full answer