Question
Asked Mar 7, 2020
58 views

[EXCEL] Realized yield: Four years ago, Lisa Stills bought six-year, 5.5 percent coupon bonds issued by the Fairways Corp. for $947.68. If she sells these bonds at the current price of $894.52, what will be her realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. Please use Excel

check_circle

Expert Answer

Step 1

The question is based on the concept to calculate yield till holding period from a bond investment, using following function in excel,

Finance homework question answer, step 1, image 1

Pv = Buying price of the bond = $ 947.68

nper = number of payment = 4 ( left for coupon payment)

Pmt = Periodic payment (5.5% annual) = 5%*$1000= $50

Fv= Selling price of the b...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: What factors determine a company’s bond rating?

A: The rates which are assigned by the bond’s rating agencies to indicate the bond’s credit quality is ...

question_answer

Q: An analyst uses a two-stage variable growth model to estimate the value of Old Maid Company's common...

A: Note: No intermediate rounding is done for calculation in the successive steps.   a) Dividend for th...

question_answer

Q: You are given the following quotes: U.S. dollar/Mexican Peso = 0.2501 U.S. dollar/Australian Dollar ...

A: To calculate the cross rate for Chines Yuan/Australian Dollar, simply divide U.S. Dollar /Australian...

question_answer

Q: Please help me with 11-5 ??‍♀️

A: Click to see the answer

question_answer

Q: [EXCEL] Zero coupon bonds: Diane Carter is interested in buying a five-year zero coupon bond with a ...

A: The question is based on the concept to calculate market value of a bond, using following function i...

question_answer

Q: Firms usually offer their customers some form of trade credit. This allowance comes with certain ter...

A: True price of the invoice is the price after a discount of 1%. Answer: Option c. 1,530.32  

question_answer

Q: The authorized share capital of the Alfred Cake Company is 120,000 shares. The equity is currently s...

A: a. The book shows a balance of common stock of $69,000. The number of shares issued is calculated be...

question_answer

Q: You sell 200 shares of a stock short for $63 per share. You want to limit your loss on this transact...

A: Stop loss price computation can be done as follows: Stop loss price = Selling price of share + (Maxi...

question_answer

Q: 5. Option to Wait Your company is deciding whether to invest in a new machine. The new machine will ...

A: Investment starts in 1st year:   NPV when initial investment is $2,800,000: The calculation of the N...