Question

D) Enper) Answer: 26. A bond is paying an annual coupon of 5%. Its YTM is 6%. What is the bond's current yield? A) 4.9% Pon of 5%. Its par value is $1,000 and its current price is $980. The B) PV = $980 5.1% 5% C) D) Tv-flood i = ? 6% YTM Answer: what are the two components of the required rate of return for a common stock? A) dividend yield and capital gain yield B) capital gain yield and equity appreciation yield C) dividend yield and equity appreciation yield D) dividend yield and interest compounding yield Answer: 28. Which of the following is not part of an annuity? A) Future value B) Present value C) Coupon rate D) Discount rate Answer:

Answer 1

Calculate the current yield as follows:

Current yield = Coupon / Current price

Current yield = (1000*5%) / $980

Current yield = 5.1%

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Required return = Capital gain yield + Dividend yield

Option A.