What is the bond yield to maturity if the bond is selling

Assignment Help Financial Management

Reference no: EM131073278

A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 10%.

a. What is the bond’s yield to maturity if the bond is selling for $1,060? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

b. What is the bond’s yield to maturity if the bond is selling for $1,000? (Do not round intermediate calculations.)

c. What is the bond’s yield to maturity if the bond is selling for $1,260? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Reference no: EM131073278

Questions Cloud

The sustainable growth rate : Your firm has an ROE of 12.0%, a payout ratio of 25%, $600,000 of stockholder's equity, and $400,000 of debt. If you grow at your sustainable growth rate this year, how much additional debt will you need to issue? The sustainable growth rate is %?

Expect the daily return correlation to change : Stock X was just added to the Dow 30 Index. Prior to the addition, the correlation between the daily returns of X and the other 29 stocks in the Index was +0.40. How do you expect the daily return correlation to change after X is added to the Dow 30 ..

Unwilling to take on any unnecessary risk : Assume that you own 200 shares of Duke Power (DUK)), which you bought for $64.00. You want to increase your return on this investment, but unwilling to take on any unnecessary risk. Which option strategy would you pursue? Be specific, thus I want you..

What is the time value of an option : What is the time value of an option? Why does an option’s time value decline as the option approaches expiration? What variables effect the Time Value of an Option? The Intrinsic Value?

What is the bond yield to maturity if the bond is selling : A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 10%. What is the bond’s yield to maturity if the bond is selling for $1,060? What is the bond’s yield to maturity if the bond is selling for $..

Reward-to-risk ratios : Stock Y has a beta of 1.45 and an expected return of 16.3 percent. Stock Z has a beta of 0.9 and an expected return of 12.6 percent. If the risk-free rate is 5.4 percent and the market risk premium is 7.9 percent, are these stocks correctly priced?

Favors payback in evaluating investments : You have just discovered that your boss favors payback in evaluating investments. Should you try to talk him out of it or should you go along with his/her desires?

What is the appropriate rate of return : Bon Temps, a constant growth company, has dividends at $2.00, with a constant growth rate at 6 percent. The company was paid a recent dividend in the amount of .12 (2.00 x .06 = .12). What is the appropriate rate of return for Bon Temp’s stock at 16 ..

What is the price of the option if it is european call : Consider an option on a dividend-paying stock when the stock price is $30, the exercise price is $29, the risk-free interest rate is 5% per annum, the volatility is 25% per annum, and the time to maturity is four months. What is the price of the opti..

User Account

All Pages