help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / 20

20

Finance

20. four-year bond has an 8% coupon rate and a face value of $1000. If the current price of the bond is $878.31, calculate the yield to maturity of the bond (assuming annual interest payments). 
21A ten -year bond has an 10% coupon rate and a face value of $1000. If the current price of the bond is $1150, calculate the yield to maturity of the bond (assuming annual interest payments). 
22 If current price of stock is $25 and you hold it for one year and received dividend of $2.5.You sold it at $27. How much return you received? Show dividend yield and capital gainseparately. 

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

20) Computatio of Yield to Maturity using Rate Function in Excel:

=rate(nper,pmt,-pv,fv)

Here,

Rate = Yield to Maturity = ?

Nper = 4 years

PMT = $1,000*8% = $80

PV = $878.31

FV = $1,000

Substituting the values in formula:

=rate(4,80,-878.31,1000)

Rate or Yield to Maturity = 12.01%

 

 

21) Computatio of Yield to Maturity using Rate Function in Excel:

=rate(nper,pmt,-pv,fv)

Here,

Rate = Yield to Maturity = ?

Nper = 10 years

PMT = $1,000*10% = $100

PV = $1,150

FV = $1,000

Substituting the values in formula:

=rate(10,100,-1150,1000)

Rate or Yield to Maturity = 7.79%

 

22) Computation of Return:

Return = (Sale Price of Stock - Purchase Price of Stock+Dividend)/Purchase Price of Stock

= ($27-$25+$2.5)/$25

= $4.5/$25

Return = 0.18 or 18%

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)