Vladimir Putin calls Donald Trump to congratulate him. President-elect Donald Trump talked to Russian President Vladimir Putin on Monday. Trump was repeatedly attacked for praising the autocratic Putin during the election, particularly in light of allegations that Russia attempted to influence the campaign.
If you purchase a bond with a 6.0% coupon at par, its yield to maturity is 6.0%. If you pay more than par, the yield to maturity will be lower than the coupon rate. If purchased below par, the bond will have a yield to maturity higher than the coupon rate. When the price of a tax-exempt bond increases above its par value, it is said to be selling at a premium. When the security sells below par value, it is said to be selling at a discount. previous | next.
Using the prior example, the estimated yield to maturity is 11.25%. However, after using this rate as r in the present value of a bond formula, the present value would be $927.15 which is fairly close to the price, or present value, of $920. Other examples may have a larger difference. A higher yield to maturity will have a lower present value or purchase price of a bond. In this example, the estimated yield to maturity shows a present value of $927.15 which is higher than the actual $920 purchase price. Therefore, the yield to maturity will be a little higher than 11.25%.