Question

Tangshan Industries has issued a bond which has a​ $1,000 par value and a 15 percent annual coupon interest rate. The bond will mature in ten years and currently sells for​ $1,250. Using this​ information, the yield to maturity on the Tangshan Industries bond is​ ________. A. 11.39 percent B. 10.79 percent C. 13.29 percent D. 12.19 percent

Answer 1

B. 10.79 percent

Step-by-step explanation:

yield to maturity = [150 + (1250 - 1000/10)]/[(1250 + 1000/2)]

= 10.79%

Therefore, The yield to maturity on the Tangshan Industries bond is 10.79%