You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000.Company(Ticker) Coupon Maturity LastPrice LastYield EST $ Vol(000’s)Xenon, Inc. (XIC) 6.300 Jan 15, 2031 94.291 ?? 57,371Kenny Corp. (KCC) 7.210 Jan 15, 2028 ?? 6.20 48,950Williams Co. (WICO) ?? Jan 15, 2035 94.825 7.02 43,811What is the yield to maturity for the bond issued by Xenon, Inc.? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to maturity %

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cancinodavidq cancinodavidq · Answer 1 · 2019-11-08T22:58:47+01:00

Answer:

the yield to maturity for the bond issued by Xenon, Inc = 6.92%

Explanation:

IMPORTANT NOTE: The data of the calculation was obtained from an online book.

Yield to Maturity [YTM] of the Bond

Yield to Maturity [YTM] = Coupon Amount + [(Par Value – Bond Price) / Maturity Years] / [(Par Value + Bond Price)/2]

Par Value = $2,000

Coupon Amount = $126 [$2,000 x 6.30%]

Bond Price = $1,885.82 [$2,000 x 94.291%]

Maturity Years = 15 Years [Jan 15,2016 to Jan 15,2031]

Therefore, Yield to Maturity [YTM] = Coupon Amount + [(Par Value – Bond Price) / Maturity Years] / [(Par Value + Bond Price)/2]

= [$126 + {($2,000 – $1,885.82) / 15 Years)] / [($2,000 + $1,885.82) / 2}]

= [($126 + $7.61) / $ 1,942.91]

= 0.0692

= 6.92%

Parrain Parrain · Answer 2 · 2022-03-25T14:07:34+01:00

Based on the coupon, maturity period, and price, the yield to maturity for the bond by Xenon Inc. is 6.09%.

This can be found using the RATE function on an Excel worksheet.

Nper = Number of periods = 2031 - 2016 = 15 years

Pmt = 5.5% x 2,000 = $110

Pv = Current price = 2,000 x 94.291% = $1,885.82

Fv - Face value = $2,000

Yield will be shown to be:

= 6.09%

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