Dynamic Systems has an outstanding bond that has a $1,000 par value and an 11 percent coupon rate. Interest is paid semiannually. The bond has 13 years remaining until it matures. Today the going interest rate is 12 percent, and it is expected to remain at this level for many years in the future. Compute the current yield. Do not round intermediate calculations. Round your answer to two decimal places. _______% Compute the capital gains yield that the bond will generate this year. Do not round intermediate calculations. Round your answer to two decimal places. _______%
Dynamic Systems has an outstanding bond that has a $1,000 par value and an 11 percent coupon rate. Interest is paid semiannually. The bond has 13 years remaining until it matures. Today the going interest rate is 12 percent, and it is expected to remain at this level for many years in the future. Compute the current yield. Do not round intermediate calculations. Round your answer to two decimal places. _______% Compute the capital gains yield that the bond will generate this year. Do not round intermediate calculations. Round your answer to two decimal places. _______%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Dynamic Systems has an outstanding bond that has a $1,000 par value and an 11 percent coupon rate. Interest is paid semiannually. The bond has 13 years remaining until it matures. Today the going interest rate is 12 percent, and it is expected to remain at this level for many years in the future.
-
Compute the current yield. Do not round intermediate calculations. Round your answer to two decimal places.
_______%
-
Compute the
capital gains yield that the bond will generate this year. Do not round intermediate calculations. Round your answer to two decimal places._______%
Transcribed Image Text:Dynamic Systems has an outstanding bond that has a $1,000 par value and an 11 percent coupon rate. Interest is paid semiannually. The bond has 13
years remaining until it matures. Today the going interest rate is 12 percent, and it is expected to remain at this level for many years in the future.
a. Compute the current yield. Do not round intermediate calculations. Round your answer to two decimal places.
%
b. Compute the capital gains yield that the bond will generate this year. Do not round intermediate calculations. Round your answer to two decimal
places.
%
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