In 2002, Berkshire Hathaway issued the first bond ever to have a negative coupon rate. Each bond had a face value of $1000, a maturity of 5 years, and paid a negative coupon which was paid annually. The coupon rate was -0.75%. In other words, every year a bondholder had to pay to Berkshire Hathaway $7.50 for holding a single bond. The price of this bond was 870.38. What was the yield to maturity of this bond when it was issued?

Answer rating: 100% (QA)

Answer To calculate the yield to maturity YTM of the Berkshire Hathaway bond with a n... View the full answer