What is the market yield to maturity at the time of sale

Assignment Help Financial Management

Reference no: EM13951436

You decide to purchase a zero coupon bond as a strategy to fund a year of college education. You estimate you will need $40,000 for a year of education. What is the price today of a 15 year zero coupon bond with face value $40,000 in a market with current market yield of 5.27% compounded annually?

Suppose you need to sell the bond after holding it for 10 years. If the market price on the day you sell is $31,070.83, what is the market yield to maturity at the time of sale?

Reference no: EM13951436

Questions Cloud

What was company retained earnings at the end of the year : A company began the year with retained earnings of $1,000. Net income for the year was $250, it repaid $350 of its line of credit balance, and it paid dividends to its shareholders of $200. What was the company’s retained earnings at the end of the y..

Distributed a tri-fold flyer to individuals and families : Save Our Beaches, a NFP organization, prepared and distributed a tri-fold flyer to individuals and families at White Sands Beach, a popular beach for both residents and tourists. In addition, one segment of the flyer solicited contributions to the or..

Venture present value concepts : The ABC Corporation has been in operation for one full year (2013). Financial statements follow. ABC’s management is interested in determining the value of the venture as of the end of 2013. Sales are expected to grow at a 20 percent annual rate for ..

What is the real rate of return on this bond : A bond that pays interest annually yields a rate of return of 10.00 percent. The inflation rate for the same period is 4 percent. What is the real rate of return on this bond?

What is the market yield to maturity at the time of sale : You decide to purchase a zero coupon bond as a strategy to fund a year of college education. You estimate you will need $40,000 for a year of education. Suppose you need to sell the bond after holding it for 10 years. If the market price on the day y..

Promotional budget and sales budget : All else constant, what would Chester’s SG&A/Sales ratio be if the company had spent an additional $1,500,000 for Cat’s promotional budget and $750,000 for Cat’s sales budget?

The optimal capital structure simultaneously maximizes eps : The optimal capital structure simultaneously maximizes EPS and minimizes the WACC. The optimal capital structure minimizes the cost of equity, which is a necessary condition for maximizing the stock price. The optimal capital structure simultaneously..

Account boasts a nominal annual return : Suppose your uncle takes the $40,000 now and wishes to invest it. He calls you because he is confused from an ad he sees. Investments-R-Us is offering the Euler Fund which compounds continuously and the Daley Fund which compounds 360 days per year. “..

Assuming no dividends are paid and no stock is issued : The Digby's balance sheet has $119,413,000 in equity. Further, the company is expecting $3,000,000 in net income next year. Assuming no dividends are paid and no stock is issued, what would their Book Value be next year?

User Account

All Pages