# Yearly ytm calculation on stock using binomial model

So I have been given this problem in class, and although I have no issues doing the binomial model on options, I cannot seem to get my head around the problem when its calculating ytm on just a stock.

Problem:

Assume a binomial model for two periods (t= 0,1,2) in which the equity hodlers hold 20% of the company and debt holders hold 80%. The company value is \$1.000. The UP branch increases value by 20% and DOWN branch decreases value by 30%. Risk free rate for any period is 10%.

Question

Prove that YTM at t=0 equals 15,21% annually.

Easy to verify that the value is 1 at time zero: $$\frac{1}{1.1^2}\sum_{s=1}^{4}{V_{s,2}Q_{s,2}}$$