## [answered] A bond currently sells for \$887 even though it has a par of

?A bond currently sells for \$887 even though it has a par of \$1,000. It was issued two years ago and had a maturity of 10 years. The coupon rate is 7% and the interest payments are made semiannually. What is its YTM??
YTM = Annual Interest

income YTM = +

Market value + Redemption price

2 70

+

887 + 1000

2 YTM = 8.91% Stock price

P0 = Dividend(1+growth)

(required rate of return - growth) P0 = 12(1+0.07)...

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This question was answered on: Sep 18, 2020

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