Preston Corporation has a bond outstanding with an annual interest payment of $90, a market price of $1,220, and a maturity date in 4 years. Assume the par value of the bond is $1,000. Find the Approximate yield to maturity Note: Use the approximation formula to compute the approximate yield to maturity and use the calculator method to compute the exact yield to maturity. Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.
Preston Corporation has a bond outstanding with an annual interest payment of $90, a market price of $1,220, and a maturity date in 4 years. Assume the par value of the bond is $1,000. Find the Approximate yield to maturity Note: Use the approximation formula to compute the approximate yield to maturity and use the calculator method to compute the exact yield to maturity. Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Preston Corporation has a bond outstanding with an annual interest payment of $90, a market price of $1,220, and a
maturity date in 4 years. Assume the par value of the bond is $1,000. Find the Approximate yield to maturity Note: Use
the approximation formula to compute the approximate yield to maturity and use the calculator method to compute the
exact yield to maturity. Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal
places.
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