Question
A bond has a par value of $1000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid annually.
A bond has a par value of $1000, 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?
Answer is 1.85% (Please explain why in the simplest equation)
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Financial Management for Public Health and Not for Profit Organizations
Authors: Steven A. Finkler, Thad Calabrese
4th edition
133060411, 132805669, 9780133060416, 978-0132805667
