What will be the approximate capital gain on this bond

Assignment Help Financial Management
Reference no: EM131990884

A GoodCredit company issued a bond with par value of $1,000.00, a time to maturity of 10.00 years, and a coupon rate of 8.70%. The bond pays interest annually. If the current market price is $870.00, what will be the approximate capital gain on this bond over the next year if its yield to maturity remains unchanged? NOTE: Capital gain is change in bond price. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM131990884

Questions Cloud

Makes semiannual coupon payments : A Focus bond has a coupon rate of 8.00% and makes semiannual coupon payments on January 15 and July 15 of each year.
Why would companies have different capital structures : Discuss what issues managers should consider when making capital structure decisions? Why would companies have different capital structures? Explain.
Propose a solution that will relieve friction : Propose a solution that will relieve friction in your company's age diverse workforce. Format your assignment according to the following formatting requirements
How important do you feel the role emotional intelligence : How important do you feel the role emotional intelligence plays in employee performance?
What will be the approximate capital gain on this bond : What will be the approximate capital gain on this bond over the next year if its yield to maturity remains unchanged?
How will you use this new knowledge as you continue : How does your personality "fit" within an organizational structure? What organizational struture (and type of team) would you work best with?
Two of these factors affect equilibrium exchange rate : Identify the factors which determine changes in equilibrium exchange rate. Discuss how any two of these factors affect equilibrium exchange rate.
How does a budget contribute to good management : How may this cost be relevant in a make-or-buy decision? Short essay- Budgetary planning- What is a budget? How does a budget contribute to good management?
Explain why each place would be a viable option : Imagine you are the HR manager at a company. You need to hire three (3) new people. One employee will work at the front desk as a customer service assistant.

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate amount of interest paid over the life of mortgage

Calculate your monthly payments on this mortgage. Calculate the amount of interest paid over the life of this mortgage.

  Decide to open own checking account

It is time to do some bargain shopping as you decide to open your own checking account.

  How long will it take you to pay off the? loan

You have an outstanding student loan with required payments of $ 550 per month for the next four years. How long will it take you to pay off the? loan? ?

  Intend to use a money market hedge

How many pounds should you buy today if you intend to use a money market hedge?

  Considering a new three-year expansion project

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.88 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life.

  Describe concept of purchasing power

Describe the concept of purchasing power.

  What is the company target debt-equity ratio

Pardon Me, Inc., recently issued new securities to finance a new TV show. The project cost $13.8 million, and the company paid $705,000 in flotation costs. If the company issued new securities in the same proportion as its target capital structure, w..

  How much will her investment be worth

How much will her investment be worth after those 16 years? What if the interest rate were 15%?

  Share of common stock-what is the price at time

A company pays a current dividend of $1.20 per share of common stock. The annual dividend will increase by 3%, 4% and 5%, respectively, over the next three years, and by 6% per year thereafter. The appropriate discount rate is 12%. What is the price ..

  Other miscellaneous itemized deductions

Gwen traveled to New York City on a business trip for her employer. Gwen spent 4 days in business meetings and conferences and then spent 2 days sightseeing in the area. Gwen's plane fare for the trip was $250. Meals cost $160 per day. Hotels and oth..

  Extra amount required for investment consistent

When projecting growing cash flows into perpetuity, the estimate should take into account the extra amount required for investment consistent with any projected growth in operating profit. (True, False, Uncertain and explain your response)

  What is the expected capital gains yield

What is the expected capital gains (or loss) yield for the coming year? Is this yield dependent on whether the bond is expected to be called?

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