Describe how yield to maturity is the same concept as the internal rate of return (or true yield) on an investment.
Answer to relevant QuestionsWhat is the significance of the yield-to-call calculation? What is the approximate yield to maturity of a 14 percent coupon rate, $1,000 par value bond priced at $1,160 if it has 16 years to maturity? Assume an investor is trying to choose between purchasing a deep discount bond or a par value bond. The deep discount bond pays 6 percent interest, has 20 years to maturity, and is currently trading at $656.80 with a 10 ...Why do corporations use convertible bonds? A firm has warrants outstanding that allow the holder to buy one share of stock at $25 per share. Also, assume the stock is selling for $30 per share, and the warrants are now selling for $7 per warrant (this, of course, is ...
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