Calculate average annual return, Financial Management

Assignment Help:

Q. Calculate Average Annual Return?

An investor buys a bond in 1978 maturity in 1980 at Rs.900. It has a maturity value of 10 years and par value of Rs. 1000. It fetches RS.90 every year. Calculate yield.

Solution:

Current Yield = Annual Cash Price 90, Purchase Price 900= 10%

Yield to Maturity = Average Annual Return Average Investment C=Annual Coupon P=Purchase of Price 1000 - 900

Average Annual Return = 90 +10= 100

Yield to Maturity = 100*100=10.5%

950

M= Maturity of par value of bond

N= Number of years remaining to maturity

Stock or Share

The return on stocks is measured by finding out dividend yield. Dividend yields can be estimated on expected yields as well as actual yields.


Related Discussions:- Calculate average annual return

Features of capital budgeting decisions, Features of Capital Budgeting Deci...

Features of Capital Budgeting Decisions 1.       Existence of potentially large anticipated profits. 2.       Involves a comparatively high degree of risk 3.       Exist

Definition of financial leverage, Q. Definition of financial leverage? ...

Q. Definition of financial leverage? One of the goals of planning an appropriate capital structure is to maximize the return on equity shareholders fund or else maximize the ea

find the worst case npv and probability, Question 1 What are the tota...

Question 1 What are the total cash inflows for project A? Discount rate (%)                      NPV of A (Rs.) 0

Ledgers, Ledgers: Ledgers record all the entries into the Cash Books. T...

Ledgers: Ledgers record all the entries into the Cash Books. They use the concept of 'double entry' bookkeeping where every ledger entry must be accompanied by another ledger e

Determine cost of redeemable debt, Q. Determine Cost of redeemable Debt? ...

Q. Determine Cost of redeemable Debt? Cost of redeemable Debt: - Usually a company issues a debt which is redeemable subsequent to a certain period during its life-time. Such a

Explain the term- authorised and paid-up share capital, Explain the term- A...

Explain the term- Authorised and Paid-up Share Capital Number of shares of stock provided for in Articles of Association of a company is the authorized share capital. This figu

Walter model, What is Walter Model? Please provide me report on Estimation ...

What is Walter Model? Please provide me report on Estimation of Walter Model. It is about 2000 words count report on topic Walter Model.

Explain about the financial management, Explain about the Financial managem...

Explain about the Financial management Financial management is concerned with efficient use of a significant economic resource (input), namely, capital. It's, so, argued that p

Abnormal earnings valuation model, Abnormal Earnings Valuation Model Ab...

Abnormal Earnings Valuation Model Abnormal Earnings Valuation Model is a method to analyse the value of the firm. The value of the firm can be the sum of three components - the

Measuring yield curve risk, Rate duration can be defined as the sen...

Rate duration can be defined as the sensitivity of the change in value to a particular change in spot rate. Every point in a spot rate curve has a rate dura

Write Your Message!

Captcha
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