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 %

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%