What is the bond nominal yield to maturity

Assignment Help Financial Management

Reference no: EM131989644

BOND YIELDS

Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065 and it sells for $1,230.

What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. %

What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. %

Would an investor be more likely to earn the YTM or the YTC?

-Select-Since the YTC is above the YTM, the bond is likely to be called.Since the YTM is above the YTC, the bond is not likely to be called.Since the YTC is above the YTM, the bond is not likely to be called.Since the coupon rate on the bond has declined, the bond is not likely to be called.Since the YTM is above the YTC, the bond is likely to be called.Item 3

What is the current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places. %

Is this yield affected by whether the bond is likely to be called?

If the bond is called, the current yield will remain the same but the capital gains yield will be different.

If the bond is called, the current yield and the capital gains yield will remain the same.

If the bond is called, the capital gains yield will remain the same but the current yield will be different.

If the bond is called, the current yield and the capital gains yield will both be different.

If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different.

-Select- Item

What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calcuation, if reqired. Round your answer to two decimal places. Enter a loss percentage, if any, with a minus sign. %

Is this yield dependent on whether the bond is expected to be called?

If the bond is not expected to be called, the appropriate expected total return is the YTC.

If the bond is expected to be called, the appropriate expected total return will not change.

The expected capital gains (or loss) yield for the coming year depends on whether or not the bond is expected to be called.

The expected capital gains (or loss) yield for the coming year does not depend on whether or not the bond is expected to be called.

If the bond is expected to be called, the appropriate expected total return is the YTM.

Reference no: EM131989644

Questions Cloud

Current yield-capital gains yield and yield to maturity : Will the actual realized yields be equal to the expected yields if interest rates change? If not, how will they differ?

What rate of return would she have earned for past year : If Janet sold the bond today for $936.98, what rate of return would she have earned for the past year?

Bond had been selling at discount rather than premium : Suppose bond had been selling at discount rather than premium. Would yield to maturity have been most likely return or would yield to call have been most likely

What is effective annual rate of interest : The terms of sale are 3/12, net 35. What is the effective annual rate of interest?

What is the bond nominal yield to maturity : What is the bond's nominal yield to maturity? Is this yield affected by whether the bond is likely to be called?

What is the most expensive car you can afford : What is the most expensive car you can afford if you finance it for 48 months?

Dollar costs of meeting this obligation using forward hedges : Explain how IBM should do a forward hedge. Compute the future dollar costs of meeting this obligation using the forward hedges.

How much should you be willing to pay for bond : Bond X is noncallable and has 20 years to maturity, a 8% annual coupon, How much should you be willing to pay for Bond X today?

What is the bond price and YTM : A 6% semiannual coupon bond matures in 4 years. What is the bond's price? What is the bond's YTM?

User Account

All Pages