Kempton enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. they have an 10% annual coupon payment, and their current price is $1,175. the bonds may be called in 5 years at 109% of face value (call price = $1,090). what is the yield to maturity? round your answer to two decimal places.

YTM is 7.46%

Explanation:

Given:

Face value of bond (FV) = $1,000

Years to maturity (nper) = 10

Coupon rate = 10%

Coupon payment (pmt) = $100 (0.1×1,000)

Price of bond (PV) = $1,175

If the bonds are held till maturity, then yield to maturity is calculated using excel function =Rate(nper,pmt,PV,FV)

Yield of bond if held till maturity is 7.46%

you have to put the parentheses like this:

in fact, you have to perform the operation inside parentheses first, and then proceed in order:

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