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Current yield, capital gains yield, and yield to maturity Pelzer Printing Inc. has bonds outstanding with 9 years left to maturity The bonds have an 9% annual coupon rate and were issued 1 year ago at their par value of $1,000 However, due to changes in interest rates, the bond's market price has fallen to $910.30. The capital gains yield last year was -8.97%.
A. What is the yield to maturity? Do not round intermediate calculations
B. What is the expected current and capital gains yield? Do not round intermediate calculations.
C. Will the actual realized yields be equal to the expected yields if interest rates change? If not, how will they differ?
Suppose a firm using accelerated depreciation instead of straight line depreciation. What effect would this have on their finical statements?
Sid bought a new $700,000, seven-year class asset on August 2, 2011. On December 2, 2011, he purchased $160,000 of used five-year class assets. If Congress re-enacts additional first-year depreciation for 2011, Sid elects not to take additional first..
What swap strategy would you suggest to the two firms if you were an unbiased advisor? What is the net cost to each party in the swap?
On February 2, 2013, an investor held some Province of Ontario stripped coupons in a self-administered RRSP at ScotiaMcLeod, an investment dealer. Each coupon represented a promise to pay $100 at the maturity date on January 13, 2019 but the investor..
Gay Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25). The stock sells for $32.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever..
The land could be sold for $2,275,000 after-tax today. What is the net present value of the proposed plant?
What is the effective annual rate of using trade credit? Does Hazelton have any alternative sources of financing available to them?
What is Sam's gross (pretax) and after-tax return on this investment, assuming that he faces a 15% tax rate on dividends and capital gains?
Assume that Constant-Growth DDM is appropriate valuation model for stock index. Assume further that long-term annual market return is expected to be
A domestic firm is considering a 8-year project. The project requires an initial acquisition cost of $2 mil and needs additional installation cost of $0.2 mil at the beginning of the project. Determine whether you will accept or reject this project u..
If Bremmer's eranings per share is $1.35, what is the price per share of Bremmer's stock? Using the price per share in part (A) determine the price per book ratio if Bremmer's equity book value per share is $9.58.
You manage a risky portfolio with expected rate of return of 18% and standard deviation of 28%. The T-bill rate (lending rate) is 8% and borrowing rate is 10%. Your client’s degree of risk aversion is A = 3.5. Calculate the Sharpe-Ratio (reward-to-va..
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