Question

A GoodCredit company issued a bond with par value of $1,000.00, a time to maturity of...

A GoodCredit company issued a bond with par value of $1,000.00, a time to maturity of 10.00 years, and a coupon rate of 8.70%. The bond pays interest annually. If the current market price is $870.00, what will be the approximate capital gain on this bond over the next year if its yield to maturity remains unchanged? NOTE: Capital gain is change in bond price. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A bond has a par value of $1,000, a time to maturity of 20 years, and...
A bond has a par value of $1,000, a time to maturity of 20 years, and a coupon rate of 7.10% with interest paid annually. If the current market price is $710, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Capital gain $_______
A bond has a par value of $1,000, a time to maturity of 10 years, and...
A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8.60% with interest paid annually. If the current market price is $860, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A bond has a par value of $1000, a time to maturity of 12 years and...
A bond has a par value of $1000, a time to maturity of 12 years and a coupon rate of 6% with interest paid annually. If the current market price is $925, what will be the approximate capital gain yield of this bond over the next year if its yield to maturity remains unchanged? Answer in percentages with two decimal places
A. A bond has a par value of $1,000, a time to maturity of 20 years,...
A. A bond has a par value of $1,000, a time to maturity of 20 years, and a coupon rate of 7.50% with interest paid annually. If the current market price is $750, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.) B. Suppose that today’s date is April 15. A bond with a 8% coupon...
A bond has a par value of $1,000, a time to maturity of 8 years, and...
A bond has a par value of $1,000, a time to maturity of 8 years, and a coupon rate of 8% with interest paid annually. If the current market price is $765, a) What is the bond's yield to maturity?        b) What is its current yield? c) What is its approximate capital gain yield of this bond over the next year? 2. Consider the bond in #1 above. Suppose the interest fall to 10% right after the bond is...
A bond has a par value of $1,000, a time to maturity of 10 years, and...
A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid annually. If the current market price is $750, what is the capital gain yield of this bond over the next year? A) .72% B) 1.85% C) 2.58% D) 3.42%
A bond has a par value of $1000, a coupon rate of 6.6% paid annually, and...
A bond has a par value of $1000, a coupon rate of 6.6% paid annually, and maturity of 17 years. If the current market price is $1,010 what is the dollar capital gain of this bond over the next year if the yield to maturity stays the same?
1. A bond has a $1,000 par value, 12 years to maturity, and a 8% annual...
1. A bond has a $1,000 par value, 12 years to maturity, and a 8% annual coupon and sells for $980. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. b. Assume that the yield to maturity remains constant for the next 2 years. What will the price be 2 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. 2. Last year Carson Industries issued a 10-year, 15%...
Apple issued a 6 year bond with a par value of $2,000. The annual coupon rate...
Apple issued a 6 year bond with a par value of $2,000. The annual coupon rate is 2.4% and it pays semi-annually. The yield to maturity is 3.15%.      a) What is the purchase price for this bond?      b) What is the current yield for this bond?
A 10-year corporate bond has an annual coupon of 9% and a par value of $1,000....
A 10-year corporate bond has an annual coupon of 9% and a par value of $1,000. The bond is currently selling at a premium of 20% to par ($1,200). Which of the following statements is more likely to be CORRECT? a.    The bond’s yield to maturity is 9%. b.   The bond’s current yield is 9%. c.    IF the bond’s yield to maturity remains constant over the next year, an investor owning the bond will earn a capital GAIN of 11%...