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footsteps company has a bond outstanding with a coupon rate of 6.3 percent and annual payments. the bond currently sells for $952.05, matures in 19 years, and has a par value of $1,000. what is the ytm of the bond?



Answer :

The Year to Maturity of the bond is 4.4%.

YTM which is Year to Maturity, is the yield of a bond if it is held till maturity.

Formula for YTM can be seen below:

(Annual interest + Par value - Market Value / Number of year) : Par value + Market value/2

Given data:

Annual interest = 1000 x 0.063= 63

Par value  = $1000

Market value  =  $952.05

Number of year = 19

Thus, we substitute all the number to YTM's formula

YTM = (63 + $1000 -  $952.05/19) : $1000 + $952.05/2

YTM= (63 + 2.52) : 1,476.025

YTM = 65.52 : 1,476.025

YTM = 0.044

YTM = 4.4%

So the result is 4.4%.

Learn more about the Year to Maturity at https://brainly.com/question/14987978

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