Question
In: Finance
A 10-year, $1,000 par value bond has a 6.75% coupon rate with interest paid semiannually. The...
A 10-year, $1,000 par value bond has a 6.75% coupon rate with interest paid semiannually. The bond currently sells for $850. What is the capital gains yield on these bonds? Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.
Solutions
Expert Solution
Capital Gains Yield= Current price-original price/Original price*100
= $850 – $1,000/ $1,000*100
= $150/ $1,000*100
= 0.15*100
= 15.
Therefore, the capital gains yield is 15.
In case of any query, kindly comment on the solution.
jeff jeffy answered 11 months agoRelated Solutions
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rounded to two decimal places. Do not enter % in the answer box.
For example, if your answer is 0.12345 or 12.345% then enter as
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is the capital gains yield on these bonds? Enter your answer
rounded to two decimal places. Do not enter % in the answer box.
For example, if your answer is 0.12345 or 12.345% then enter as
12.35 in the answer box.
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interest paid semiannually. The bond currently sells for $800. What
is the capital gains yield on these bonds? Enter your answer
rounded to two decimal places. Do not enter % in the answer box.
For example, if your answer is 0.12345 or 12.345% then enter as
12.35 in the answer box.
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