dyl inc.'s bonds currently sell for $870 and have a par value of $1,000. they pay a $65 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. what is their yield to maturity (ytm)? a. 7.38% b. 8.66% c. 6.66% d. 8.02% e. 9.71%

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26-10-2022
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dyl inc.'s bonds currently sell for $870 and have a par value of $1,000. they pay a $65 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. what is their yield to maturity (ytm)? a. 7.38% b. 8.66% c. 6.66% d. 8.02% e. 9.71%

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arshikhan8123 arshikhan8123 · Answer 1 · 2022-10-29T03:22:00-04:00

Dyl Inc.'s bonds currently sell for $870 and have a par value of $1,000. They pay a $65 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. Their Yield to maturity will be 8.02%.

What is yield to maturity?

Yield to maturity (YTM) is the total rate of return that will have been earned by a bond when it makes all interest payments and repays the original principal. YTM is essentially a bond's internal rate of return (IRR) if held to maturity.

What is yield to maturity and how is it calculated?

To calculate the expected 1 Year Returns of a Debt Fund, you can use this formula: Expected 1 Year Returns = YTM + (Interest Rate Change x Modified Duration ) – Expense Ratio. Let's see how you can use this formula with an example: Calculation of 1 Year Returns for Debt Fund A. Modified Duration.

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