A very special IBM bond is available to be bought in the market for $83.33. This bond pays semi-annual coupons of $2.50 every six months. The next coupon payment will be exactly six months from now. This bond has no maturity date--it will pay coupons forever and never repay the principal or face value. What is the annual yield-to-maturity of this bond? Write your answer as a percentage without the percent sign, e.g., write 2.53% as 2.53.

Answer rating: 100% (QA)

To calculate the annual yieldtomaturity YTM of the bond we need to use the fo... View the full answer