What is the yield to maturity

Assignment Help Finance Basics
Reference no: EM132037471

It is now January 1, 2016, and you are considering the purchase of an outstanding bond that was issued on January 1, 2014. It has a 8.5% annual coupon and had a 15-year original maturity. (It matures on December 31, 2028.) There is 5 years of call protection (until December 31, 2018), after which time it can be called at 109-that is, at 109% of par, or $1,090. Interest rates have declined since it was issued, and it is now selling at 111.545% of par, or $1,115.45.

  • What is the yield to maturity?
  • What is the yield to call?

Reference no: EM132037471

Questions Cloud

Coats cost international products at delivery : how much will the 10,000 leather coats cost International Products at delivery?
What is the bond price of nesmith corporation : Nesmith Corporation's outstanding bonds have a $1,000 par value, a 11% semiannual coupon, 11 years to maturity, and an 8.5% YTM
Do the powells have adequate liability coverage : Do the Powells have adequate liability coverage? What would you recommend regarding their liability coverage?
What is the bond current market price : What is the bond's current market price? Round your answer to the nearest cent.
What is the yield to maturity : Interest rates have declined since it was issued, and it is now selling at 111.545% of par, or $1,115.45. What is the yield to maturity?
What is your estimate of the stock current price : Nonconstant Growth Valuation A company currently pays a dividend of $3.25 per share (D0 = $3.25). What is your estimate of the stock's current price?
What will be the annual payment for the machine : The Chicago hope hospital purchased a MRI machine for 2 million dollars, using a 5 year loan at 10% interest. What will be the annual payment for the machine?
Bond based on the closing pricing : How to calculate the YTM of RM's 5-year bond based on the closing pricing.
Compute the realized rate of return for an investor : Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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