Homework Answers
1. Nominal yield = total of the annual interest payments/ face value of the bond = 10,000/100,000= 10%
2. YTM = The discount rate at which the present values of all cash flows is equal to the current price of the bond
PV = C1/(1+YTM) + C2/(1+YTM)2 +C2/(1+YTM)3 + ...... + Cn + FV/(1+YTM)n
C = coupon payments
N = No of coupon payment
PV = current value of the bond
Putting all values in the formula and calculating YTM, we get = 10.843%
3. Current yield = annual interest earned/price of the bond = 10,000/95,000 = 10.52%
4. Capital gain yield = (Selling price - Purchase price) / Purchase price = (97,000-95,000)/95,000 = 2.1%
Add Answer to:
compute for various required
ou equity capital using Wo aillerent methods. 20 marks Co Dondend capitalization...
please help to calculate discount yield, YTM, Holding period yield and Capital Gain. I have done...
please help to calculate discount yield, YTM, Holding period
yield and Capital Gain. I have done the rest. This question is
intended for personal knowledge and not for assignment
purposes.
of QUESTIUN 3: upum URT eyr Assume that a 10-year bond with a face value of Tshs 100,000 is selling at a discount price of Tshs 95,000. It has an annual coupon income of Tshs 10,000. The investor plar to sell it after 5 years at a price of Tshs...
compute for required V Chu only QUESTION 2: 130 marks) (This Question is Conipulsory) (a) ABC...
compute for required
V Chu only QUESTION 2: 130 marks) (This Question is Conipulsory) (a) ABC Investment Bank is planning to issue both 4-year coupon bond and zero- coupon bond each with a par value of Tshs 10 million. The former bord has a coupon vale of 12%. . Required: GO) Do the duration analysis of the proposed coupon bond and zero-coupon bond issuesnirehe required rate of retum on these bonds is 10%. [10 marks 1) Whaiphervations and condusions uo...
Problem 1 (Required, 25 marks) You are given two 5-year callable bond (Bond A and Bond...
Problem 1 (Required, 25 marks) You are given two 5-year callable bond (Bond A and Bond B) .Bond A: It has face value $600 and pays coupon semi-annually at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed on any coupon payment date (including maturity date) at price $660. Bond B: It has face value $650 and pays coupon quarterly at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed...
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of...
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the band can be called in 6 years at a price of $1,065 and it sells for $1,270. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC: Would an investor be more likely to earn the YTM or the YTC? b. What...
7.11 Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000. Currently, th...
7.11
Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,060 and it sells for $1,150. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: Would an investor be more likely to earn the YTM or the YTC?...
eBook Problem Walk-Through Last year Carson Industries issued a 10-year, 14 % semiannual coupon bond at...
eBook Problem Walk-Through Last year Carson Industries issued a 10-year, 14 % semiannual coupon bond at its par value of $1,000. Currently, the 6 gos 7. bond can be called in 6 years at a price of $1,060 and it sells for $1,300. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. 9. YTM: % YTC: Would an investor be more likely...
estio You are considering investing in a bond that pavs 6% semi-annual coupons with $1,000 face value and 10 years to maturity Ifyou have bought the bond todav at a veld (APR) of 5%, what is vour...
estio You are considering investing in a bond that pavs 6% semi-annual coupons with $1,000 face value and 10 years to maturity Ifyou have bought the bond todav at a veld (APR) of 5%, what is vour purchase price? Is this a par, discount or premium bond? Explain. (a) (5 marks) One year later, the bond's YTM (APR) has gone up to 6% and you sell it immediately after receiving the coupons. (i) What is the bond's current yield? (ii)...
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of...
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065 and it sells for $1,270. a. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % Would an...
my question is Q 29, zero coupon bonds ( part b and c continue on next...
my question is Q 29, zero coupon bonds ( part b and c continue
on next page), thank you so much !
IOU (OU) 5.7 Apr 19, 2028 108.96 ?? 1.827 27. Bond Prices versus Yields [LO2) a. What is the relationship between the price of a bond and its YTM? b. Explain why some bonds sell at a premium over par value while other bonds sell at a discount. What do you know about the relationship between the coupon...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock pri...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock price at any point in time. III. requires the required return to be higher than the growth rate. IV. assumes that dividends increase by a constant amount forever. V. none of the above is correct Multiple Choice 0 II, and IV only 0 V only 0 1, I, II, and IV only 0 Ill only 0 In order to estimate...
please help to calculate discount yield, YTM, Holding period
yield and Capital Gain. I have done the rest. This question is
intended for personal knowledge and not for assignment
purposes.
of QUESTIUN 3: upum URT eyr Assume that a 10-year bond with a face value of Tshs 100,000 is selling at a discount price of Tshs 95,000. It has an annual coupon income of Tshs 10,000. The investor plar to sell it after 5 years at a price of Tshs...
compute for required
V Chu only QUESTION 2: 130 marks) (This Question is Conipulsory) (a) ABC Investment Bank is planning to issue both 4-year coupon bond and zero- coupon bond each with a par value of Tshs 10 million. The former bord has a coupon vale of 12%. . Required: GO) Do the duration analysis of the proposed coupon bond and zero-coupon bond issuesnirehe required rate of retum on these bonds is 10%. [10 marks 1) Whaiphervations and condusions uo...
Problem 1 (Required, 25 marks) You are given two 5-year callable bond (Bond A and Bond B) .Bond A: It has face value $600 and pays coupon semi-annually at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed on any coupon payment date (including maturity date) at price $660. Bond B: It has face value $650 and pays coupon quarterly at an annual coupon rate 7.2%. Starting from 4th year, the bond can be redeemed...
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the band can be called in 6 years at a price of $1,065 and it sells for $1,270. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: YTC: Would an investor be more likely to earn the YTM or the YTC? b. What...
7.11
Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,060 and it sells for $1,150. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. YTM: % YTC: Would an investor be more likely to earn the YTM or the YTC?...
eBook Problem Walk-Through Last year Carson Industries issued a 10-year, 14 % semiannual coupon bond at its par value of $1,000. Currently, the 6 gos 7. bond can be called in 6 years at a price of $1,060 and it sells for $1,300. a. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places. 9. YTM: % YTC: Would an investor be more likely...
estio You are considering investing in a bond that pavs 6% semi-annual coupons with $1,000 face value and 10 years to maturity Ifyou have bought the bond todav at a veld (APR) of 5%, what is vour purchase price? Is this a par, discount or premium bond? Explain. (a) (5 marks) One year later, the bond's YTM (APR) has gone up to 6% and you sell it immediately after receiving the coupons. (i) What is the bond's current yield? (ii)...
Last year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065 and it sells for $1,270. a. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % Would an...
my question is Q 29, zero coupon bonds ( part b and c continue
on next page), thank you so much !
IOU (OU) 5.7 Apr 19, 2028 108.96 ?? 1.827 27. Bond Prices versus Yields [LO2) a. What is the relationship between the price of a bond and its YTM? b. Explain why some bonds sell at a premium over par value while other bonds sell at a discount. What do you know about the relationship between the coupon...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock price at any point in time. III. requires the required return to be higher than the growth rate. IV. assumes that dividends increase by a constant amount forever. V. none of the above is correct Multiple Choice 0 II, and IV only 0 V only 0 1, I, II, and IV only 0 Ill only 0 In order to estimate...
Most questions answered within 3 hours.
-
Which of the following best describes tidal volume? options:
1.The amount of oxygen in the air...
asked 48 seconds ago -
1. Smaller cost distortions occur when the traditional systems'
single indirect-cost rate and the activity-cost-driver rates:...
asked 8 minutes ago -
Using either a FMECA approach or some other appropriate RCA
tool, identify five risk treatment actions...
asked 9 minutes ago -
If for a test the P-value is between 0.0025 and 0.005, what
conclusion can you draw?...
asked 21 minutes ago -
Using Python. Write a function clean2(aList) that takes a list
of integers aList as argument, and...
asked 26 minutes ago -
Intrapreneurship is defined as the
development of an enterprise culture with an existing (Nandan,
2009). An...
asked 40 minutes ago -
QUESTION 1 Tamiflu is a drug used to treat influenza. A study
found that Tamiflu reduced...
asked 44 minutes ago -
Which of the following would be less likely to be used to
allocate factory overhead when...
asked 50 minutes ago -
Transverse pulses travel with a speed of 195 m/s along a taut
copper wire whose diameter...
asked 49 minutes ago -
Sampling for Engineers Homework question 11.51
Suppose that Y1;Y2;Y3;Y4 denote a random sample from a
Poisson(θ)...
asked 52 minutes ago -
Which of the following is cleaved by regulated intramembrane
proteolysis (RIP)? Select any/all answers that apply....
asked 52 minutes ago -
Random characters You decide to create a program characters.py
that fills a two-dimensional list with random...
asked 1 hour ago