RainDrops Ltd, an umbrella manufacturing company is predicting growing demand for its products since it was announced that weather patterns are changing and that we can expect wetter weather in the year ahead. RainDrops needs to raise funds to manufacture more umbrellas and has been advised by its investment bank to issue one hundred $1000 bonds with a 6-year maturity at a coupon interest payment of $40 per quarter. If, with two years to go to maturity, the value of these bonds was $960, what would the effective annual yield to maturity on these bonds be? Calculate. 

Answer rating: 100% (QA)

To calculate the effective annual yield to maturity on the bonds we can use the ... View the full answer