ASHLEY INC. HAS A 20 YEAR BOND OUTSTANDING THAT IS CURRENTLY SELLI...

13. Ashley Inc. has a 20 year bond outstanding that is currently selling at a 4.5625% premium with a 4.75% coupon rate. If the bond pays interest semi-annually what is the yield to maturity? A) 4.40% B) 4.45% C) 4.54% D) 4.61% E) 4.89% Solution: A PV -1,045.625 FV 1000 N 2 X 20 =40 PMT 47.50/2 = 23.75 I 2.2022 per 6 mo. YTM = 2.2022 X2 = 4.40%