Calculate the yield to maturity on this bond

Assignment Help Business Economics
Reference no: EM13149590

A corporate bond that has a coupon rate of 6 percent matures in 5 years. Its price is currently $115 (per $100 face amount). a. Calculate the current yield on this bond. b. If this bond is held to maturity, will its holder realize a gain or loss at maturity? How much will the gain or los be? Divide the gain or loss by the number of years to maturity to calculate the average annual gain/loss. c. Calculate the yield to maturity on this bond.

Reference no: EM13149590

Questions Cloud

Explain what is the maximum wavelength of light capable : What is the maximum wavelength of light capable of removing an electron from a hydrogen atom in the energy states characterized
How do your answers change if the bond sells for a premium : Suppose a Sears coupon bond sells at a discount from face value. Is the coupon rate higher or lower than the current yield? Explain. B. Is the yield to maturity greater or lower than the current yield?
Audit documentation and financial statements : A second-partner review of the audit documentation and financial statements is performed to ensure that the:
How many grams of hydrogen are needed : how many grams of H2 are needed to react with an excess of N2 and produce 6,867 grams of NH3? the molar mass H2 is 2.016g and the molar mass NH3 is 17.04g
Calculate the yield to maturity on this bond : Divide the gain or loss by the number of years to maturity to calculate the average annual gain/loss. Calculate the yield to maturity on this bond.
What price does this firm charge its customers : what conditions might the Justice Department approve a merger between two companies that operate in an industry with a premerger of Herfindahl-Hirschman index of $2,900 if the post merger index is expected to increase by $225?
Explain relative humidity equilibrium vapor : A 0.75-L bottle is cleaned, dried, and closed in a room where the air is 24°C and 50.% relative humidity (that is, the water vapor in the air is 0.5 of the equilibrium vapor
Explain how this may be related to the problem of adverse : Explain how this may be related to the problem of adverse selection. What could banks do to try to reduce this problem?
Exports and imports are substracted from u.s. gdp : U.S. exports and imports each affect domestic production because: A. imports are added to U.S. GDP and exports are subtracted B. exports and imports and added to U.S. GDP C. imports are substracted from U.S. GDP and exports are added. D. exports ..

Reviews

Write a Review

Business Economics Questions & Answers

  Should you get it fixed that car requires repairs

You find that the car requires repairs of 1,200 dollars in order to get it to run. Once it is repaired, it will definitely not break down again. Assuming that the car is worth 3,500 dollars after repairs, should you get it fixed.

  Illustrate what dollar wage must be paid in the second year

pecifies that the real wage will rise by 10 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.1 in the second year. Illustrate what dollar wage must be paid in the second year.

  Explain how much tax sally pays on her gain

If capital gains tax is on nominal gains, Explain how much tax Sally pays on her gain. Calculate Kelly's capital gains if tax is on real gains.

  Assuming that the income effect is negligible

Assuming that the income effect is negligible, how much will he be hurt if the cost of strawberries goes from $1 a pint to $2 a pint.

  Explain how democratic is it support an unelected judiciary

Explain how Democratic is it to support an unelected judiciary. Defend your argument for or against the election of federal judges and Supreme Court justices.

  Illustrate what were you thinking about the economy

Illustrate what were you thinking about the economy in 2005 and did you ever foresee a crisis of this magnitude. What policies could you have suggested to avoid the impending economic crisis.

  Illustrate what do you think would happen to sale and price

Though it does lead to an interesting next question. Illustrate what do you think would happen to sale and price of DVDs after this.

  Illustrate what is the average product of labor

K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). Illustrate what is the average product of labor.

  What occurs when a new technology makes another one obsolete

Explain what occurs when a new technology makes another one obsolete in terms of economic profit.

  Illustrate what is maximum amount would be willing to pay

Illustrate what is maximum amount you would pay for offer of $2,000. Suppose offer was $2,000, but delivery was to be in 2 years instead of 1 year. Illustrate what is maximum amount you would be willing to pay.

  Rationale behind the choice of target or acquirer

What is the rationale behind the choice of target or acquirer, if appropriate for your opening bid and your overall bidding strategy.

  Elucidate the resulting paint cost per gallon

Illustrate what percentage of G1 can be mixed with G2 and still satisfy the customers. Elucidate the resulting paint cost per gallon.

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