What is the percentage realized rate of return

Assignment Help Financial Management
Reference no: EM131891502

Suppose you buy a bond with a coupon of 7.9 percent today for $1,000. The bond has 15 years to maturity. Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What is the percentage realized rate of return? Assume that interest payments are reinvested at the original YTM. The bond pays coupons twice a year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Please show all work and how to get the answer using a BAII Plus calculator

Reference no: EM131891502

Questions Cloud

Total firm value of zego after capital structure change : What is the total firm value of Zego after the capital structure change? What is the market value of Zego’s equity before the capital structure change?
Find the initial outlay and net investment : XYZ would like to purchase a new machine. Find the initial outlay/net investment.
Shipping and installation charges for the equipment : XYZ would like to purchase a new machine. It will cost $50,000. Shipping and installation charges for the equipment are expected to total $5,000.
Should the project be accepted or rejected : Compute the NPV for Project M if the appropriate cost of capital is 9 percent. Should the project be accepted or rejected?
What is the percentage realized rate of return : What is the percentage realized rate of return? Assume that interest payments are reinvested at the original YTM
Find year one net cash flow : Find year one net cash flow. Find year two net cash flow. Find year three net cash flow. Find year four net cash flow. Find year five net cash flow.
Find the marginal cost of preferred stock : ABC's common stock currently sells for $22 a share and next year will pay a quarterly dividend of $0.25 per share. Find the marginal cost of preferred stock.
Types of investments over the previous three decades : Suppose you gathered the following return data on these types of investments over the previous three decades:
Find the marginal cost of equity : ABC's tax rate is 35%. Find the marginal cost of equity.

Reviews

Write a Review

Financial Management Questions & Answers

  Concept to encompass surf lifestyle for the home

two recent MBA graduates decided to broaden this casual surf concept to encompass a “surf lifestyle for the home.”

  Use for incoming parts for a kanban system

A manager wants to determine the number of containers to use for incoming parts for a kanban system to be installed next month. The process will have a usage rate of 90 pieces per hour. Because the process is new, the manager has assigned an ineffici..

  Use no-load or load funds and closed-end or open-end funds

You should not only talk about the fund types in which you would invest but also whether you would use no-load or load funds and closed-end or open-end funds.

  What is the present worth of the desalting option revenue

what is the present worth of the desalting option revenue at an interest rate of 8% per year?

  Investor purchased a futures contract at beginning of year

A Investor purchased a futures contract at the beginning of the year. If the price of a security represented by a futures contract ____ over the year,

  Expected to yield an annual income

A bauxite mine is expected to yield an annual income of $90,000 for the next 26 years, after which it will be sold for $5850. An investor wants an annual return on his investment of 6%. If he can establish a sinking fund earning an annual interest ra..

  Debt financed and what is the after-tax cost of debt

A firm has issued $20 million in long-term bonds that now have 10 years remaining until maturity. The bonds carry an 8% annual coupon but are selling in the market for $877.10. The firm also has $45 million in market value of common stock. For cost o..

  What will be its stock price the stock repurchase

Beta Industries has net income of $1,300,000, and it has 330,000 shares of common stock outstanding. The company's stock currently trades at $44 a share. Beta is considering a plan in which it will use available cash to repurchase 30% of its shares i..

  Spot exchange rate between british pound and dollar

If purchasing power parity holds, what is the spot exchange rate between the British pound and the dollar?

  Leased and several terms are unique to auto leases

Automobiles are often leased and several terms are unique to auto leases. What is your monthly lease payment for a 36-month lease if the sales tax is 7 percent?

  Higher plow back ratio means ratio

All else the same, a higher plow back ratio means a(n) _________P/E ratio. You wish to earn a return of 10% on each of two stocks,A and B.Each of the stocks is expected to pay a dividend of $4 in the upcoming year. The expected growth rate of dividen..

  What was your total real rate of return on this investment

Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? what was your total real rate of return on investment?

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