Definition of Yield To Maturity
Yield to maturity or YTM is a rate at which the present value of all cash inflows related to a bond or debt security is exactly equal to the market value of the bond. It is also referred to as the internal rate of return or the IRR of a bond.
Example of Yield to Maturity:
A bond that is currently trading at $1,245 has a coupon rate of 20% and will mature in 5 years at par value i.e. $1,000. To find out the YTM you can use the IRR formula in excel.
View More Corporate Finance Definitions
Related Questions of Yield To Maturity
In February 2015 Treasury 4¾s of 2041 offered a semi
Suppose you purchase a 30-year, zero-coupon bond
Suppose you purchase a ten-year bond with 6% annual
Clifford Clark is a recent retiree who is interested in investing some
Your company has two divisions: One division sells software and the
Even though most corporate bonds in the United States make coupon payments
a. An 8%, five-year bond yields 6%.
Daniel B. Butler and Freida C. Butler, husband and
Last year Clark Company issued a 10-year, 12%
Your company wants to raise $10 million by issuing 20-
Show All
