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Lelu [443]
2 years ago
10

A bond has a face value of $1,000, a coupon of 5% paid annually, a maturity of 34 years, and a yield to maturity of 8%. What rat

e of return will be earned by an investor who purchases the bond for $652.39 and holds it for 1 year if the bond’s yield to maturity at the end of the year is 9%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.)

Business
1 answer:
Lyrx [107]2 years ago
5 0

Answer:

- 3.21%

Explanation:

In this question, we use the PV formula which is shown in the spreadsheet.  

The NPER represents the time period.

Given that,  

Future value = $1,000

PMT = 1,000 × 5% = 50

NPER = 34 years -  1 year =  33 year

Rate of interest = 9%

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the present value would be $581.42

Now the return would be

=  Sale price + interest - purchase price

= $581.42 + $50 - $652.39

= -$20.97

And, the total return would be

=  Return ÷ purchase price

=  -$20.97 ÷ $652.39

= - 3.21%

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Answer:

Rebel

Explanation:

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2) Academic

3) Vocational

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Martin Jackson receives an hourly wage rate of $30, with time and a half for all hours worked in excess of 40 hours during a wee
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Explanation:

Computation of Net Pay

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7 0
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Read 2 more answers
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Answer:

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3 years ago
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Solution :

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b). The market value of the equity one year from now is

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  = $ 44.5 million - $ 18 million

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c). The expected return on the equity without the leverage = 10%

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= 0.93 %

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