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: 75% (12 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...
-
Assume that Barclays Plc. issued coupon bonds with fixed coupon rate 5 percent redeemed at par (100) in 5 years. What is the price of Barclays bonds if the market interest rate is 5 percent? What is...
-
1. What common factor might explain the high price paid for drinks on trains or at pop concerns and the high price paid by supporters to watch top football clubs? 2. A football club is newly promoted...
-
The Tesla 6 is a new custom- designed sports car. An analysis of the task of building the Tesla 6 reveals the following list of relevant activities, their immediate predecessors, and their duration:...
-
Where are four sales tickets being processed for the sale of different technology stocks. The first order is marked as being sold at 9:40 am, and the remaining three tickets were marked as sold at...
-
Wanda has been reading up on management, using magazines at the grocery store checkout line as her primary resource. She admits that popular magazines may not be the best source of information about...
-
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?
-
What are decision support systems, and what role do they play in the business environment?
-
Determine the left and the right end behavior of this function. F(x) = (2x-1)/(x - 1) 17. If an object is moved along a line so that it is at F(X)= 5X-2X Find: F'(X) = F'(3)= 18. For F(X)=8X-2X Find;...
-
How many different codons can be found in the RNA sequence if we use "four-letter", instead of "three-letter" genetic codes with still four bases (G, A, U, C)?
-
3. XTerra Adventures Enterprises plans to raise new financial capital by issuing a $100 par, 4%, convertible preferred stock. If a similar preferred stock is currently trading at $30 per share, what...
-
A mass weighing 36 pounds, attached to the end of a spring, lengthens it 5 inches. Initially, mass is released from rest at a point 2 inches above the equilibrium position. Find the equation of...
-
DHEL Corporation issues a 7% coupon interest rate bond with a maturity of 20 years. The face value of the bond, payable at maturity is $1000. The required rate of return on Dhels bond is 8% with...
-
In what ways is the concept of the developing world a useful and informative one? In what ways could it be an overgeneralisation or even misleading for some purposes?
-
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...
-
When an organization periodically assesses its security policies and procedures that relate to ePHI, what is it helping to maintain?
-
Four sports teams offered Sam 5-year contracts to play football. All four offers include an upfront sign-up bonus, end of year annual payments, and end-of-the contract termination bonus. Sam wishes...
-
In a conservative scenario with expected earnings to be 1,267,500 before interest and taxes (EBIT) and a long term percentage of total assets 74% and a short-term percentage of total assets of 26%...
Study smarter with the SolutionInn App