Question 11

7)Find the capital gains yield on this bond. Yield to maturity of the bond is 14% Current yield on the bond is 1 1%. Price of the bond is S1100. Inflation rate is only what you need as information to solve this problem) Capitol qaan a)25% 4%. Tax rate is 30% (use ield to. c) 1% d) 12.5% 8) Use the following data for answer the next three questions. James Penney convertible bonds with a coupon rate of 10% and a lifef30 years. Straight bonds are now yielding 12%. Find the Bond or Investment value corporation sells CPT PV- 414.04 N 30 $1,000 CS838 d)S725 fvs1000 414 -828 a) b)$920 9) use above data. If the conversion ratio 50, and the stock is selling for $25, what is the conversion value conversion value d)s980 50x10 a) $1,000 c)$1125 10) use above data. If the actual price of the bond is $1340, what is the conversion Premjum in the market? conversion Tremiom 1340-(50 a)s100 b)$80 c)565 90 11)Your savings are invested in a taxable investment account (i.e. what you earn in this account is subject to taxes ). If you invest in which of the following bonds - you will end up with having to pay taxes on "phantom interest " (interest not earned annually by you but yet you have to estimate it and report the interest in your tax return and pay taxes on them) a) Bonds with coupon interest rates b) Zero coupon bonds 12) which of the following type of bonds is not secured by any collateral or real asset ? bi mortgage hond c) equipment trust certificate