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Sample problem to calculate YTM

Sample problem to calculate YTM - 508 = 1000(factor factor...

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Sample Problem to calculate the YTM for a zero-coupon bond. A company issues a ten year zero coupon bond for $508. The face value of the bond is $1,000. What is the YTM? Solution: Using The Present value of $1 table:
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Unformatted text preview: 508 = 1000 (factor) factor = 508 / 1000 = .508 Looking across the row for ten years, you find this factor in the column for 7%, which is the YTM...
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