Stone Sour Corp. issued 20-year bonds 2 years ago at a coupon rate of - 15613

Solution Posted by
yousafbhutta

yousafbhutta

Rating : (28)C
Solution Detail
Price: $0.50
  • From: Business,
  • Posted on: Sun 10 Mar, 2013
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

Stone Sour Corp. issued 20-year bonds 2 years ago at a coupon rate of 7.40 percent. The bonds make semiannual payments. If these bonds currently sell for 104 percent of par value, what is the YTM? (Round your answer to 2 decimal places. (e.g., 32.16))

Solution Description

 

Stone Sour Corp. issued 20-year bonds 2 years ago at a coupon rate of 7.40 percent. The bonds make semiannual payments.

(Round your answer to 2 decimal places. (e.g., 32.16))

 YTM

7.00 correct %

 

Explanation:

Here we are finding the YTM of a semiannual coupon bond. The bond price equation is:

 

P = $1,040 = $37.00(PVIFAR%,36) + $1,000(PVIF

Attachments
Stone.docx
Stone.docx