What is the effective annual yield and yield to maturity

Assignment Help Financial Management
Reference no: EM131304606

PK Software has 8.2 percent coupon bonds on the market with 25 years to maturity. The bonds make semiannual payments and currently sell for 109.75 percent of par.

What is the current yield on PK's bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Current yield - %

What is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Yield to maturity - %

What is the effective annual yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Effective annual yield - %

Reference no: EM131304606

Questions Cloud

Firm has maximum acceptable payback period : Jordan Enterprises is considering a capital expenditure that requires an initial investment of $ 63,000 and returns after tax cash inflows $13,246 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. Should the company ..
Retirement planing : You just turned 25 years old and want to retire when you turn 65. You expect to live for 25 years after retirement and want to withdraw $50,000 per year in retirement, starting on your 65th birthday. You expect to earn a return of 5% on your investme..
What was the company net capital spending : Calculating net capital spending. Rotweiler Obedience School's December 31,2015, balance sheet showed net fixed assets of $1,975,000 , and the December 31, 2016, balance sheet showed net fixed assets of $2,134,000. The company's 2016 income statement..
Company will keep constant growth rate forever : Storico Co. just paid a dividend of $1.90 per share. The company will increase its dividend by 20 percent next year and will then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent divid..
What is the effective annual yield and yield to maturity : PK Software has 8.2 percent coupon bonds on the market with 25 years to maturity. The bonds make semiannual payments and currently sell for 109.75 percent of par. What is the current yield on PK's bonds? What is the effective annual yield?
What can be done from her perspective to market the services : What can be done from her perspective to market the services they provide? Why was licensure required for his/her job if any? Are there other areas he/she can function effectively? If so where?
What does bantum mean by the term post-racial : Being "post-racial" initially might sound like it could be a good thing... What does Bantum mean by the term "post-racial" and what are some of his reasons for saying that Christians cannot be "post-racial"?
Identify role of activism in changing political landscape : Identify the role of activism in changing the political landscape. (Reflect on the past few presidential elections). How can you be an activist to support positive change in government at all levels?s
What document you research to determine costs can be allowed : What document will you research to determine whether costs can be allowed? Write a short memo to document your opinion about whether these costs would be allowable indirect costs to be recovered in part by federal grants.

Reviews

Write a Review

Financial Management Questions & Answers

  What is its percentage after-tax cost of debt

Micro Spinoffs Inc. issued 20-year debt a year ago at par value with a coupon rate of 5%, paid annually. Today, the debt is selling at $1,380. If the firm’s tax bracket is 20%, what is its percentage after-tax cost of debt? Assume a face value of $1,..

  What is the percentage change in the price of bonds

Both Bond Bill and Bond Ted have 11.4 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 5 years to maturity, whereas Bond Ted has 22 years to maturity. If interest rates suddenly rise by 2 percent, what is the perc..

  Considering two mutually exclusive projects

Zellers, Inc. is considering two mutually exclusive projects, A and B. Project A costs $75,000 and is expected to generate $48,000 in year one and $45,000 in year two. Project B costs $80,000 and is expected to generate $34,000 in year one, $37,000 i..

  What is the value of the fund today

Your brother, who is 6 years old, just received a trust fund that will be worth $24,000 when he is 21 years old. If the fund earns 0.10 interest compounded annually, what is the value of the fund today?

  Effective cost of borrowing in case

Your firm has an average collection period of 28 days. Current practice is to factor all receivables immediately at a discount of 1.8 percent. What is the effective cost of borrowing in this case?

  Find implied forward rate

A one period discount bond is priced at $94.20 per $100 of face value. A two period 6.3% coupon bond is priced at $100.50 per $100 of face value and a 3 period 8.3% coupon bond is priced at $99.75 per $100 of face value. Find implied forward rate 2f1..

  Ideally a leading indicator of a variable of interest

Ideally a leading indicator of a variable of interest should be used as

  Graph the value of a call option

Graph the value of a call option (vertical axis) against a, the instantaneous standard deviation of the returns on  the underlying asset;- What are the conditions under which an American put would be exercised early on a stock that pays no dividends?

  Local convention center to help pay for maintenance.

Berklin County has a deal with the local convention center to help pay for maintenance. The county will pay $4817 each month and increase its payment by 0.5% each subsequent month. The county has committed to paying this maintenance for 10 years. How..

  Grows at the sustainable growth rate

ICC, Inc. (ICC) had sales of $300,000 on which it earned net income of $22,000. Its total debt is $51,000 and total equity is $80,000. Last year, ICC paid dividends of $6,000. If the total debt ratio remains constant and the company grows at the sust..

  Weighted average cost of capital

(Weighted average cost of capital) In the spring of last year, Tempe Steel learned that the firm would need to re-evaluate the company's weighted average cost of capital following a significant issue of debt. The firm now has financed 43 percent of i..

  Working on the valuation for an upcoming IPO

You are working on the valuation for an upcoming IPO. The company that wants to sell its stock expects the following future free cash flows (FCF, in millions of dollars): -6 in year 1, 5 in year 2, 16 in year 3, and cash flows are expected to grow st..

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