What is the expected capital gains yield

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Reference no: EM131980874

Last year Carson Industries issued a 10-year, 14% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,060 and it sells for $1,300.

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: EM131980874

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