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QUESTION
Stellar Corp. recently issued $100 par value deferred coupon bonds, which will make no coupon payments in the next four years.
Stellar Corp. recently issued $100 par value deferred coupon bonds, which will make no coupon payments in the next four years. Regular annual coupon payments at a rate of 8% will then be made until the bonds mature at the end of 10 years. If the bonds are currently priced at $87.00, their yield to maturity is closest to:
- 6.0%.
- 8.0%.
- 10.1%.
How to use calculator to calculate this YTM
YTM is the interest rate investor will get if he/she hold the bond till its maturity.The best way to calculate is using ExcelYear012345678910IRRFormula Cash flow-8700008888...