What is bond yield to maturity

Assignment Help Financial Management
Reference no: EM131611247

(Yield to maturity) A bond's market price is $850. It has a $1,000 par value, will mature in 8 years, and has a coupon interest rate of 9 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 16 years? What if it matures in 4 years?

a. The bond’s yield to maturity if it matures in 8 years is ___________%. (Round to two decimal places.)

b. The bond’s yield to maturity if it matures in 16 years is ___________%. (Round to two decimal places.)

c. The bond's yield to maturity if it matures in 4 years is ___________%. (Round to two decimal places.)

Reference no: EM131611247

Questions Cloud

Zane owns portfolio worth : Zane owns a portfolio worth $28,000 that consists of 2 stocks. How much is his Bronwyn Bank stock worth if his portfolio has a beta of 0.90?
What is the average daily collection float : What is the average daily collection float? What is the weighted average delay? calculate the daily cost of the float.
Managers incorporate income taxes into break-even analysis : How can managers incorporate income taxes into Break-even analysis?
Calculate the required monthly payments to pay off the loan : Calculate the required monthly payments to pay off the loan. What is the unpaid loan amount after making one year's payments?
What is bond yield to maturity : What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 16 years?
What is the effective annual interest rate on line of credit : Ignoring the commitment fee, what is the effective annual interest rate on this line of credit?
Which report identifies percentage of accounts receivable : Which report identifies the percentage of accounts receivable that are delinquent by 90 days or more?
Actual sales growth above firm sustainable growth rate : Actual sales growth above a firm’s sustainable growth rate can be managed by:
Flexible financial policy from restrictive financial policy : Which of the following tend to rise when a firm switches to a flexible financial policy from a restrictive financial policy?

Reviews

Write a Review

Financial Management Questions & Answers

  Compute the current yield on both bonds

Compute the current yield on both bonds. A drawback of current yield is that it does not consider the total life of the bond.

  The market index fund

Suppose you can invest in only the market index fund and 1-month Treasury bill because of some regulation.

  Accounting breakeven quantity

A company is considering a project to manufacture a product with the following pro forma cost and sales information: Accounting Breakeven QUANTITY = 10,500 units; Cash Breakeven QUANTITY = 8,200 units; What is the PRICE of the product under this expe..

  Compute the present value of deposit

Compute the present value of a $3,700 deposit in year 3 and another $3,200 deposit at the end of year 5 if interest rates are 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

  Firm is financing its growth with retained earnings

A firm is financing its growth with retained earnings. It is retaining 80 percent of its annual earnings. The firm's historic return on equity is 16 percent, a figure that is expected to continue into the future. How much will earnings grow over the ..

  Practice of executing unauthorized trades

The practice of executing unauthorized trades for an investment account by a salesman or broker in order to generate commission from the account: A civil wrong, not arising from a contract, for which a court will provide a remedy:

  Equity valuation-constant-growth gordon growth model

EQUITY VALUATION (10%) The common stock of PQR Inc. is expected to pay a dividend of $15 for each share exactly one year from now. Given the risk of the stock, the market requires a rate of return of 22%. What is the “constant”-growth Gordon Growth M..

  Bonds price moves to par value as it approaches maturity

A bond's price moves to par value as it approaches maturity. The shorter a bond has to maturity, the less sensitive the bond's price is to changes in market interest rates. The longer a bond has to maturity, the more sensitive the bond's price is to ..

  Investment return-what was your percent return

Investment Return-MedTech Corp stock was $51.70 per share at the end of last year. what was your percent return?

  Which customers to pursue-which products or services

Companies want to make the best marketing decisions possible regarding which customers to pursue, which products or services to introduce or promote, where to sell their products or services, and at what price. Although not perfect, the use of market..

  Operating leverage and financial leverage

What is the difference between operating leverage and financial leverage? Avoid formulas.

  Supports state regulation of insurance

The National Association of Insurance Commissioners (NAIC) supports state regulation of insurance. Go to their web site, www.naic.org and click on "States and Jurisdictions."

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