What is the after-tax-real rate of return from owning bond

Assignment Help Financial Management
Reference no: EM131983379

1. Investor D purchased a bond exactly one year ago that was yielding 6% at the time of purchase. D is in the 30% tax bracket on his personal income. It is now one year later and the inflation rate for the year was 2.1%. As a result, what is the after-tax, real rate of return from owning the bond?

2. Consider 2 securities: Asset 1 is a 4-year discount bond with an annual yield of 5%. Asset 2 is a 5-year discount bond with a yield of 6%. What is the implied or expected yield on a one year bond issued at the end of year 4?

Reference no: EM131983379

Questions Cloud

What is the most she should be willing to pay : What is the most she should be willing to pay for a 50.1 percent stake in the bakery?
Explain what present value and future value : Explain what Present Value and Future Value are in you own words. What is the difference between the Present Value of $ and the Present Value of an Annuity?
How abc model aligns with the current goals : HI5017 Managerial Accounting - You are required to prepare a report to recommend about ABC model for your company - An identification of the company's mission
Difference between actual and expected return : For example, what is return? What is the difference between actual and expected return?
What is the after-tax-real rate of return from owning bond : It is now one year later and the inflation rate for the year was 2.1%. As a result, what is the after-tax, real rate of return from owning the bond?
Determining the constant growth : McCracken? Roofing, Inc., common stock paid a dividend of ?$1.08 per share last year. The company expects earnings and dividends to grow
What was its operating profit margin : In 2014 Electric Autos had sales of $180 million and assets at the start of the year of $310 million. what was its operating profit margin?
What types of characteristics do you anticipate : Case - School of Rock: Filling a Gap in Music Education and Growing Via Franchising. What types of characteristics do you anticipate School of Rock looks
How many shares would the company have had to issue : How many shares would the company have had to issue to avoid having a decrease in cash during the year?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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