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22 January, 20:15

The texas instruments company has 9 percent coupon bonds on the market with seven years left to maturity. the bonds make annual payments. if the bond currently sells for $874.60, what is its ytm?

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  1. 22 January, 23:23
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    To Calculate YTM,

    YTM = {C + (F-P) / n} / (F+P) / 2

    where C = coupon rate,

    F = face value

    P = price

    n = no. of years

    Therefore, YTM = {90 + (1000-874.6) / 7} / (1000+874.6) / 2

    => 11.72%
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