Question

The Bonds of Corporation Y are trading at £89.92, have a 20 year maturity date, a nominal value of £100 and pay an annual coupon of 9 percent. What is the yield to maturity of these bonds?

Answer 1

$$YTM = \frac{9 + (100 - 89.92)/20}{(100 + 89.92)/2} = 0.1\ or\ 10\%.$$