Is the ytm higher or lower than the coupon rate

Assignment Help Financial Econometrics
Reference no: EM131018268

1. A corporate bond having at least 10 year to mature and compute

a. The bond's price (last)

b. Annual coupon interest ($)

c. Bond's current yield

d. Yield to maturity using semi-annual compounding. Show complete cash flows from the bond over its remaining life.

e. Compare the coupon rate and the YTM. Is the YTM higher/lower than the coupon rate? Why?

Reference no: EM131018268

Questions Cloud

Indicate a hypothetical aaa german bund term structure : What is the relationship between the German sovereign (discount) yield curve and the BB corporate one? Reason by analogy with the US markets and explain
What is the percentage change in the number of books : Suppose that Jack has 150 books and he goes out this weekend and purchases an additional 30 books. What is the percentage change in the number of books that Jack owns
Design and implement a simple website : Design and implement a simple website to demonstrate the knowledge gained so far in the course, mainly in using JavaScript and CSS.
What is the net present value of an investment : What is the net present value of an investment that cost $300000 with a residual value of $30000 that has an annual cash flow of $50000 and a life of 25 years using a 12% minium rate of return?
Is the ytm higher or lower than the coupon rate : Compare the coupon rate and the YTM. Is the YTM higher/lower than the coupon rate? Why?
Which users may be interested in each type of ratio : Which users may be interested in each type of ratio? What does the collected data reveal about the performance and position of the company?
What is diversity and why is it important : As an HR manager, how would you advise employers to avoid liability in your selected issue? What is the difference between compliance with laws and managing diversity? Why is this important?
What clarification do you need regarding the posting : What did you learn from your classmate's posting? What additional questions do you have after reading the posting? What clarification do you need regarding the posting?
Explain when an investor may want to use this strategy : Currently, the stock price is $40. A European call option with a strike price of $50 expiring in 2 years is trading at $20. And the put option with a strike price of $30 is trading at $15.

Reviews

Write a Review

Financial Econometrics Questions & Answers

  Determine what is the banks cost of preferred stock

Holdup Bank has an issue of preferred stock with a $5.55 stated dividend that just sold for $92 per share. What is the bank's cost of preferred stock

  What is the time-weighted rate of return for the investment

A share of stock is purchase at t = 0 for $100, and at the end of the next year, t = 1, another share is purchased for $120 (ex-dividend stock price). At the end of year 2, both shares are sold after dividend payments for $130 each.

  What will be the amount of your monthly mortgage payment

The house you want to buy costs $275 thousand. You plan to make a cash down payment of 10 percent, and borrow the rest in a 30 year mortgage at 4.68 percent APR. What will be the amount of your monthly mortgage payment

  Find the price of the bond with quartely payments

The redemption value is $425. The bond has nominal annual copoun rate of interest of 4.4% compouned quarterly. The yeild rate is also a nominal annual rate compounded quarterly of 5.2%.

  How many years do the bonds have left until they mature

Martin Software has 10.0 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 107.8 percent of par.

  Determine what is the profitability index for the project

If the initial outlay for such a production is $1,500,000 and the appropriate discount rate is 6 percent for the cash flows, then what is the profitability index for the project

  Find what is the most are willing to pay as a lump sum

Your parents are giving you $310 a month for 5 years while you are in college. At a 8 percent discount rate, what are these payments worth to you when you first start college

  Describe behavior of present value of each future dividend

Suppose a dividend of $1.25 was paid. The stock has a required rate of return of 11.2% and investors expect the dividend to grow at a constant rate of 10%. Complete parts (a) through (e) below.

  Determine what is the preferred project after four years

An entrepreneur has to decide between two possible investment projects. Both projects cost $80.000 upfront. The short term project pays $35.000 for the next three years.

  What will be the companys dividend payout ratio in 2012

Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 340,000 shares of stock outstanding, and its stock trades at $54 per share.

  What is the npv if the discount rate is 15 percent

Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,459,972.

  Determine what must the rate be less than to be worth

What must the rate be less than to be worth it to incur a compensating balance of $1,200 in order to get a 1.5-percent lower interest rate on a 1-year, pure discount loan of $100,000

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