A corporate bond was quoted yesterday at 106 while today's quote is 104.5 at a constant yield

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A corporate bond was quoted yesterday at 106 while today's quote is 104.5 at a constant yield to maturity. The bond has a face value of $1,000 and pays interest semi-annualy at an annual coupon rate of 10%.

What is the YTM on this bond?

Related Book For answer-question

Fundamentals Of Corporate Finance

ISBN: 9781259654756

10th Canadian Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts, J. Ari Pandes, Thomas Holloway

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Posted Date: May 11, 2023 04:08 AM

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A corporate bond was quoted yesterday at 106 while today's quote is 104.5 at a constant yield

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Expert Answer:

Solution The yield to maturity YTM of a bond is the expected rate of return that an investor will earn if they hold the bond until its maturity date assuming that all interest payments are reinvested ... View the full answer

Fundamentals Of Corporate Finance

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