What is the ytm of the bond

Assignment Help Finance Basics
Reference no: EM131693663

An annual coupon bond issued by ABC Inc. 3 years ago has 2 years (i.e. 2 coupon payments) remaining till maturity (i.e. it was issued as a 5 year bond). The coupon rate is 8% and interest is paid once a year. If the price of the bond today is $980, the par value is $1,000 and the next interest payment is due one year from now, what is the YTM of the bond? A) 8.80% B) 10.5% C) 12.3% D) 9.14%

Please show steps especially in calculating the present/future value, thank you!

Reference no: EM131693663

Questions Cloud

Calculate the defensive interval ratio : Using the following financial statement data excerpts from KRJ Enterprises annual report, calculate the defensive interval ratio
Prepare a powerpoint to present to the audience : Prepare a PowerPoint to present to the audience. In your PowerPoint presentation, be sure to include the below concepts.
Discuss the approach you would you use for treating client : How will you tell if the client suffers from a psychotic disorder as opposed to a substance-induced disorder?
Invest today to buy the car in two years : You have about $50 000 but the car costs $68 500. If you can earn 9 percent how much do you have to invest today to buy the car in two years?
What is the ytm of the bond : An annual coupon bond issued by ABC Inc. 3 years ago has 2 years (i.e. 2 coupon payments) remaining till maturity
Prepare the december entry for indigo corporation : Prepare the December 31 entry for Indigo Corporation to record amortization of intangibles. Prepare July 1 entry for Indigo Corporation to record the purchase
Prepare a production budget for the first quarter of year : Preparing a Production Budget Patrick Inc. makes industrial solvents. In the first four months of the coming year, Patrick expects the following unit sales.
How technology can benefit the transfer of learning : Illustrate how technology can benefit the transfer of learning. Comment on the appropriateness of the utilized technology in learning.
Predetermined manufacturing overhead rate : If Mayflower Company. allocates overhead based on machine hours, what is the predetermined manufacturing overhead rate?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is your favorite retailer

From your perspective, what are the benefits and limitations of purchasing a home entertainment system directly from a number of component manufacturers.

  When cities pass laws limiting the rent landlords can

when cities pass laws limiting the rent landlords can charge on apartments the laws usually apply to existing buildings

  What is your prediction for the price of picc tomorrow

Assume that you know nothing about PICC other than the information contained in the prospectus. Based on your knowledge of finance, what is your prediction for the price of PICC tomorrow? Provide a short explanation of why you think this will occu..

  What is the tax effect of selling the old machine

The company's tax rate is 35% Working capital is expected to increase by $3,000 at the inception of the project, but this amount will be recaptured at the end of year five. What is the tax effect of selling the old machine?

  U.s. interest rates easier or more difficult

What is a Eurodollar? If a French citizen deposits $10,000 in Chase Manhattan Bank in New York, have Eurodollars been created? What if the deposit is made in Barclay's Bank in London Chase Manhattan's Paris branch? Does the existence of the Eurodolla..

  Describing non-value maximizing mergers in finance world

Describe how Agency problems can lead to non-value maximizing mergers in finance world.

  Calculate modified duration using the information

d. Define convexity and explain how modified duration and convexity are used to ap- proximate the bond's percentage change in price, given a large change in interest rates.

  What were bertin total long-term debt in 2010

How much new long-term debt financing will be needed in 2011? (Hint: AFN - New stock = New long-term debt.) Round your answer to the nearest dollar.

  Analysing and comparing the financial performance and status

Need to Prepare a formal report analysing and comparing the financial performance and status of both companies American Airlines and United

  The effect of the portfolio on risk of a security

The effect of the portfolio on risk of a security

  What is the payment rate per mile

You get paid travelling expenses according to the distance you drive in your car plus a weekly sum of £21. You put in a claim for 420 miles travelled.

  Discuss stock price maximization and profit maximization

Discuss and explain the difference between stock price maximization and profit maximization? Under what conditions might profit maximization not lead to stock price maximization?

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