Calculate the Yield to Maturity on Tangshan Industries Bond

What is the Yield to Maturity (YTM) on the Tangshan Industries bond?

A. 13.29%

B. 10.79%

C. 11.39%

D. 12.19%

E. 14.75%

Answer:

The correct option is C. 11.39%.

Bond yield to maturity is the total return anticipated on a bond if it is held until it matures. A bond's yield to maturity is equivalent to its interest rate. This is the rate at which the bond will pay you back on a yearly basis until it matures.

The formula for calculating the yield to maturity on a bond is as follows:

YTM = (C + ((F - P) / n)) / ((F + P) / 2)

Where:

P is the price of the bond

n is the number of years left until maturity

C is the annual coupon interest rate

F is the bond's face value

Using the formula, the yield to maturity on the Tangshan Industries bond is as follows:

Given:

P = $1,250

F = $1,000

n = 10 years

C = 15%

YTM = 11.39%

Therefore, the yield to maturity on the Tangshan Industries bond is 11.39%.

To know more about Bond yield to maturity, you can refer to financial resources or websites that provide detailed information on bond calculations.