Netflix Inc has outstanding bonds with an annual 8 percent coupon

Finance Dec 25, 2020

Netflix Inc has outstanding bonds with an annual 8 percent coupon. The bonds have a par value of $1,000 and a price of $900. The bonds will mature in 10 years. What is the yield to maturity on the bonds? (YIELD TO MATURITY)

Expert Solution

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N = 10 (The Bond is for 10 Years)

PV = -900 (The present value of the bond is $870)

PMT => 8% of 1,000 = 80 ( The coupon 8% is on Face Value)

FV = 1,000 (The Face value of bond is $1,000)

CPT + I/Y = 9.599

The YTM of the bond is 9.599%

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