Calculation of current yield of government

Assignment Help Finance Basics
Reference no: EM13828124

Problem:

a) What is the current yield on government bond, issued exactly five years ago, that has a current market price of $5866 and pays an annual coupon payment of $350, and matures at the end of 4 years, when the face value of $5000 will be paid?

b) What is the yield to maturity of this bond?

Additional Information:

This question is from Finance as well as it is about calculation of current yield of government bond issues five years ago and which pays out an annual coupon payment as well as matures at the end of 4 years. A discounted cash flow has been computed to estimate the current value of bond.

Reference no: EM13828124

Questions Cloud

Discuss technology diffusion s-curves and innovation : Discuss technology diffusion, S-Curves and innovation decision process. I will use the healthcare industry as an example. Our healthcare system is ever evolving - new technologies, insurance models, and information systems are shaping the system o..
Improving purchasing performance by strategic relationship : Improving Purchasing Performance By Strategic Relationship
Computing the effective yield of discount bond : A discount bond has a face value of $10000 and promises repayment at the end of 15 years and has a market price of $3541. What is its effective yield?
Calculation annuity to be paid to an insurance policy : An individual has accumulated some wealth in a self-administered stock market investment fund and now wants to cash in (or liquidate) a part of this fund and use it to purchase an annuity from an insurance company that will pay her $65000 annual b..
Calculation of current yield of government : What is the current yield on government bond, issued exactly five years ago, that has a current market price of $5866 and pays an annual coupon payment of $350, and matures at the end of 4 years, when the face value of $5000 will be paid?
Importance of financial statements in an organization : Explain the importance of financial statements in relation to reporting organizational performance, how such financial statements link together, and the information that they provide for managers.
Find the most convincing piece of evidence : About how astronomers have come to the conclusion that the Big Bang is how the universe began. What do you find the most convincing piece of evidence in support of the Big Bang theory?
Debt-intensive capital structure : Present arguments in support of a MNC favoring a debt-intensive capital structure. Present arguments in support of a MNC favoring an equity-intensive capital structure.
Conduct a competitive and marketing swot-analysis : Then, conduct a competitive and marketing SWOT-Analysis [Strengths, Weaknesses, Opportunities, and Threats] of the firm.

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Microeconomics and two macroeconomics principles

Identify two microeconomics and two macroeconomics principles or concepts from the simulation. Explain why you have categorized these selected principles or concepts as microeconomics or macroeconomics.

  Key financial information

Determine what type of key financial data are available at the page you entered? Write one paragraphs describing what information can be obtained under each "hot link".

  Estimate 5 year average return for each security

The organizations are Dell, Ford, UPS, Disney, and Proctor & Gamble. Estimate the five-year average return for each security.

  Words of the strategic plan for organization

Write a draft of no more than 1,800 words of the strategic plan for your organization, including the following:

  The risk adjusted discount rate for the firm is 12 and the

corporation considering the purchase of a new machine with an initial outlay of 4000. and expected cash flows in yrs.

  Preferred stock vs. common stock

Preferred stockholders do not participate in the receivings of the corporation beyond the stated rate in the way that common stockholders do.

  Which of the following items cannot be found on a firms

which of the following items cannot be found on a firms balance sheet under current liabilities?a. accounts payable.b.

  Percentage change in the price of bond

A bond trader purchased each of the following bonds at a yield to maturity of 10%. Immediately after she purchased the bonds, interest rates fell to 7%. What is the percentage change in the price of each bond after the decline in interest rates? F..

  Organization allows for a much more blended environment

Write a 1000 words - A matrixed organization allows for a much more blended environment (e.g - vertical administrative functions with horizontal areas of expertise) and encourages innovation, better information flow, and rapid action.

  Compute the weighted average cost of capital

Option b: a new machine that would yield a 15% return but would cost 17% to finance through common equity.

  Which one of the following terms is applied

Which one of the following terms is applied to the financial planning method which uses the projected sales level as the basis for determining changes in balance sheet and income statement account values?

  What is the current cost of common equity for the firm

You are analyzing the after-tax cost of debt for a firm. You know that the firm's 12-year maturity, 10.80 percent semi-annual coupon bonds are selling at a price of $1,189.39. These bonds are the only debt outstanding for the firm What is the curr..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd