Springfield nuclear energy inc bonds are currently trading at 283.30. the bonds have a face value of $1,000, a coupon rate of 2% with coupons paid annually, and they mature in 20 years. what is the yield to maturity of the bonds?

The yield to maturity of the bonds is 11%

Explanation:

Price at which the bonds is currently trading = 283.30$

Face Value = $1000

Coupon rate = 2%

Hence the coupon bond rate = $1000 ×2%

=

=$20

Years to maturity: 20 years

Formula used:  

=

Where C is the bond coupon rate

F is the face value

P is the price

N is the number of years

=

=11%

The yield to maturity of the bonds is 11%

25% is the answer