Bond with annual coupon payments

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Reference no: EM131848184

1. Consider a 26-year bond with 9 percent annual coupon payments. The market rate (YTM) is 7.2 percent for this bond. The current yield of the bond is _______ percent. Answer it in percentage without the % sign, and round it to two decimal place, e.g., 5.69.

2. Assume you are given the following information about current interest rates: 5-Year Treasury Yield6.5% 2-Year Treasury Yield5.0% Based on the Pure Expectations Theory of interest rates, determine the yield on a 3-Year Treasury two years from now.

3. Company AXR had sales revenues of $48 million last year. Cash operating expenses were $24 million. The depreciation expense was $6 million. The tax rate is 40%. No dividends were paid. The stock for company AXR is currently selling for $18 per share and there are 3 million shares outstanding. What is the current P/E ratio for AXR?

Reference no: EM131848184

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