Question
Consider the below quote from Yahoo! Finance for a General Electric bond issue. The bond has a $1000 face value.If it can be called in
Consider the below quote from Yahoo! Finance for a General Electric bond issue. The bond has a $1000 face value.If it can be called in 4 years at $1275.00, what is this bond's current yield? Yield-to-Maturity? Capital gains yield? And yield to call?Is an investor in this bond likely to receive the YTM or the YTC? Why?
GE CAPITAL INTERNOTES
As of 5-March-2021
OVERVIEW
Price: 106.25
Coupon (%): 6.000
Maturity Date: 2038
Yield to Maturity (%): ????
Current Yield (%): ????
Fitch Ratings: AA
Coupon Payment Frequency: Semi-annual
Type: Corporate
Callable: Yes
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Based on the information provided Current Yield We can calculate this as the annual coupon payment divided by the current price Current Yield Coupon Rate Face Value Current Price 2 since its semiannua...
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Step: 3
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Financial Management Theory and Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
2nd Canadian edition
176517308, 978-0176517304
