What are the total return, the current yield, and the capital gains yield for the discount bond?
Question:
What are the total return, the current yield, and the capital gains yield for the discount bond? Assume that it is held to maturity and the company does not default on it.
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 69% (13 reviews)
The current yield is defined as follows The capital gains yield is defined as follows The total expected return is the sum of the current yield and th...View the full answer
Answered By
Danish Sohail
My objective is to become most reliable expert for clients. For last 10 years I have been associated with the field of accounting and finance. My aim is to strive for best results and pay particular attention to client needs. I am always enthusiastic to help clients for issues and concerns related to business studies. I can work on analysis of the financial statements, calculate different ratios and analysis of ratios. I can critically evaluate stock prices based on the financial analysis and valuation for companies using financial statements of the business entity being valued with use of excel tools. I have expertise to provide effective and reliable help for projects in corporate finance, equity investments, financial accounting, cost accounting, financial planning, business plans, marketing plans, performance measurement, budgeting, economic research, risk assessment, risk management, derivatives, fixed income investments, taxation, auditing, and financial performance analysis.
4.80+
78+ Reviews
112+ Question Solved
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
Question Posted:
Related Video
The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. This video will give a complete tutorial on how to calculate Yield to Maturity on Microsoft Excel
Students also viewed these Accounting questions
-
Assume that it is the year 2027. In your company, central planning has given way to frontline decision making, and bureaucracy has given way to teamwork. Shop floor workers use handheld devices and...
-
The concrete gravity dam is designed so that it is held in position by its own weight. Determine the minimum dimension x so that the factor of safety against overturning about point A of the dam is...
-
Assume that it is now January 1, 2009. Wayne-Martin Electric Inc. (WME) has developed a solar panel capable of generating 200% more electricity than any other solar panel currently on the market. As...
-
find the steady state expression for vo in the circuit fig 9.32 if ig = 500cos2000tmA 3) 9.32 Find the steady-state expression for u,, in the circuit of Fig. P9.32 if i = 500 cos 2000 mA. Figure...
-
Maine Construction builds office buildings. The buildings generally cost between $5 million and $8 million to build, and the plumbing can cost between $300,000 and $600,000 depending on the building...
-
The first quarter of 2008 had not yet ended and Steve Savage already knew the company would surpass the projected $22 million in revenues for the year. He and the management team had doubled sales...
-
Define the following terms: (i) an environmental management system; (ii) an internal environmental audit; (iii) an external verification (or assurance) engagement.
-
The market for smoothies is perfectly competitive and the market demand schedule is in the first table. Each of the 100 producers of smoothies has the costs given in the second table when it uses its...
-
(a) What does the following algorithm do? function: F(x, y) input: nonnegative integers x and y if y = 0: return 0 z = F(x, FLOOR(y/2)) if y is even: return 2z else: return x+2z
-
One of the main applications of priority queues is in operating systemsforscheduling jobs on a CPU. In this project you are to build a program that schedules simulated CPU jobs. Your program should...
-
What is the yield to maturity on a 10-year, 9%, annual coupon, $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does the fact that it sells at a discount or at a premium...
-
What is interest rate (or price) risk? Which has more interest rate risk, an annual payment 1-year bond or a 10-year bond? Why?
-
True or false: Given a BST, let \(x\) be a leaf node, and let \(p\) be its parent. Then either (1) the key of \(p\) is the smallest key in the BST larger than the key of \(x\) or (2) the key of \(p\)...
-
If Mac goes ahead and recognizes a sale of \($15,000\) in its December 31 financial statements for this inconclusive agreement, which of the following is correct? (a) CFFO will increase by...
-
If XYZ goes ahead and secures the backdated order and recognizes it as a bill and hold sale, which of the following is correct? (a) This would cause operating income to exceed CFFO by \($10,000\. (b)...
-
If XYZ goes ahead and secures the backdated order and recognizes it as a bill and hold sale in its December 31 financial statements, which of the following is correct? (a) Operating income would be...
-
Nature, a leading science magazine, argues (https://www.nature.com/articles/d41586-020-01518-y) that COVID19 will force universities to confront long-standing challenges in higher education, such as...
-
Why do overstatements of restructuring reserves sometimes cause gross margin percentages to change suddenly?
-
Might it be desirable to use a combination of team-based and individual incentives at Lakeside Utility Company? How might such a plan be structured? Lakeside Utility Company provides electrical power...
-
Subtract the polynomials. (-x+x-5) - (x-x + 5)
-
Consider the following combinations of reactants. In each case, predict whether a substitution reaction will occur. If so, identify the products and suggest the likely mechanism. (a) CN + CH 3 CH 2...
-
Assume that interest rate parity holds and that 90-day risk-free securities yield a nominal annual rate of 3% in the United States and a nominal annual rate of 3.5% in the United Kingdom. In the spot...
-
You are the vice president of Worldwide Info X change, headquartered in Minneapolis, Minnesota. All shareholders of the firm live in the United States. Earlier this month you obtained a loan of 10...
-
Early in June 1983, it took 245 Japanese yen to equal $1. In August 2017, that exchange rate had fallen to 109 yen to $1. Assume that the price of a Japanese-manufactured automobile was $9,000 in...
-
There are two real numbers a for which (2x)+15 (1-x) = 8x - 3x + 2. The sum of these two real numbers is
-
Net sales Cost of goods sold Depreciation INCOME STATEMENT (Figures in $ millions) Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes Net income $ 882.00 742.00 32.00...
-
Venita is sewing new curtains. The table below shows the relationship between the number of stitches in a row and t length of the row. Sewing Number of Length (cm) stitches 5 1 15 3 20 4 30 6 What is...
Study smarter with the SolutionInn App