(Yield to? maturity) Abner? Corporation's bonds mature in 18 years and pay 14 percent interest annually

Finance Dec 08, 2020

(Yield to? maturity) Abner? Corporation's bonds mature in 18 years and pay 14 percent interest annually. If you purchase the bonds for ?$950?, what is your yield to? maturity?

Your yield to maturity on the Abner bonds is ?(Round to two decimal? places.)

Expert Solution

Computation of Yield to Maturity using Rate Function in Excel:

=rate(nper,pmt,-pv,fv)

Here,

Rate = Yield to Maturity = ?

Nper = 18 years

PMT = $1,000*14% = $140

PV = $950

FV = $1,000

Substituting the values in formula:

=rate(18,140,-950,1000)

Rate or Yield to Maturity = 14.81%

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