Skye Industries Inc. bonds currently have 14 years remaining to maturi

Skye Industries Inc. bonds currently have 14 years remaining to maturity. What is the yield to maturity of the firm’s semi-annual bonds if they carry a face value of $1,000, an annual coupon rate of 8% and have a current price of $885.16?

A) 8.00%
B) 8.75%
C) 9.50%
D) 10.25%

ANSWER

C
Explanation: C) Via Calculator: N = 14*2, PMT = 40, FV = 1,000, PV =- $885.16, Solve for ytm = 9.50%.