Question
Current yield, capital gains yield, and yield to maturity Pelzer Printing Inc. has bonds outstanding with 24 years left to maturity. The bonds have an
Current yield, capital gains yield, and yield to maturity
Pelzer Printing Inc. has bonds outstanding with 24 years left to maturity. The bonds have an 12% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in interest rates, the bond's market price has fallen to $920.70. The capital gains yield last year was -7.93%.
What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. %
For the coming year, what is the expected current yield? (Hint: Refer to footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answer to two decimal places. % For the coming year, what is the expected capital gains yield? (Hint: Refer to footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answer to two decimal places. %
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