Yield to maturity formula with coupon rate 119030-Is the yield to maturity the same as coupon rate
Solution The yearly coupon payment is $1000 × 7% = $70, using the formula above, we get CY = 70 / 800 * 100 CY = 875%, The Current Yield is 875%Yield to Maturity 3 Yield of a Bond on a Coupon Date For an ordinary semiannual coupon bond on a coupon date, the yield formula is where c is the coupon rate and T is the maturity of the bond in years Annuity Formula Math result Finance application This formula gives the present value of an annuity of $1Apart from the yield to maturity approach and bondrating approach, current yield and coupon rate (nominal yield) can also be used to estimate cost of debt but they are not the preferred methods Example Lockheed Martin Corporation has $900 million $1,000 per value bonds payable carrying semiannual coupon rate of 425% How To Calculate Bond Prices And Yields On The Series 7 Exam Dummies Is the yield to maturity the same as coupon rate