Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Springfield Nuclear Energy Inc
Springfield Nuclear Energy Inc. bonds are currently trading at $1.025.01. The bonds have a face value of $1.000. a coupon rate of 8% with coupons paid annually, and they mature in 20 years. What is the yield to maturity of the bonds? The yield to maturity of the bonds is El% (Round to two decimal places.)
We can calculate the yield to maturity by using the following formula in excel:-
=rate(nper,pmt,-pv,fv)
Here,
Rate = Yield to maturity
Nper = 20 periods
Pmt = Coupon payment = $1,000*8% = $80
PV = $1,025.01
FV = $1,000
Substituting the values in formula:
= rate(20,80,-1025.01,1000)
= 7.75%
