Coupon bond-rate of return and price

Assignment Help Financial Management

Reference no: EM131056766

Suppose you buy a 9.6 percent coupon bond today for $1,090. The bond has 6 years to maturity. a. What rate of return do you expect to earn on your investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Rate of return: %

Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What price will your bond sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Price: $

Reference no: EM131056766

Questions Cloud

How the targets fit into the critical infrastructure picture : Using the presentation and (NIPP) as a guide, analyze the attacks of 9/11. Prepare a 3 - 5 page essay, using APA style formatting, on how the targets fit into the critical infrastructure picture. Discuss, in detail, how these events impacted cri..

The logistic cumulative distribution function : (b) Make probability paper for this distribution. Show lines on the probability scale for 1, 2, 5, 10, 20, 50, 80, 90, 95, 98, and 99% and show the calculation.

Calculate the holding period return : Calculate the Holding Period Return: You invested to one of investment $45 per year last year. This year is worth $54 per share. Company also pays dividend $15 per share. What is the total return over the past year.

Subjective estimate of the uncertainty in the estimate : Circuit breaker A mechanical life test of 18 circuit breakers of a new design was run to estimate the percentage failed by 10,000 cycles of operation. Breakers were inspected on a schedule, and it is known only that a failure occurred between cert..

Coupon bond-rate of return and price : Suppose you buy a 9.6 percent coupon bond today for $1,090. The bond has 6 years to maturity. a. What rate of return do you expect to earn on your investment? Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell..

Determine the impact on share price : REH Corporation's most recent dividend was $2.42 per share, its expected annual rate of divident growth is 5%, and the required return is now 15%. A variety of proposals are being considered by management to redirect the firm's activities. Determine ..

Develop a short list of what you see as the current debates : Develop a short list of what you see as the current debates in the role of music education in the curriculum. Use this knowledge to conduct a database search for a range of journal articles on music education.

Project taking into account the flotation costs : The expansion project at Zingerman requires an initial investment of $10,000,000. The target D/E ratio is 3/2 for the firm. Flotation costs are 10% for equity and 4% for debt. How much funds have to be raised for this project taking into account the ..

The market price of the firm preferred stock : The market price of the firm’s preferred stock is $116.00. The preferred pays a 12.1% annual dividend on its $100 par value. Floatation costs are $4 per share. What is the cost of preferred equity when floatation costs are accounted for?

User Account

All Pages