Ask Experts Questions for FREE Help !
Ask
    finley20's Avatar
    finley20 Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Aug 6, 2007, 02:57 PM
    Bond prices and yields
    Several years ago, Castle in the Sand Inc. issued bonds at face value at a yield to maturity of 7 percent. Now, with 8 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 15 percent. What has happened to the price of the bonds?
    Choux's Avatar
    Choux Posts: 3,047, Reputation: 376
    Ultra Member
    		  
    #2

    Aug 6, 2007, 03:31 PM
    It looks like the cost to buy the bond went south!

    Bond was issued at a cost of $100... at yesterday's close, the cost to buy the bond is only $82.00, thereby increasing the percentage of return for the low price.

    [i did not figure out the real cost at closing - just gave an example] :)
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Amide bond (peptide bond) [ 3 Answers ]

hello ever1 I don't know much about chemistry, so hlp me with this is amide bond (peptide bond), balanced chemical equation?

Bond Prices [ 1 Answers ]

If the interest rate in market declines from 11% to 8%, What is the bond price at 11% and at 8%? What would be the percentage of return if you sell it at 8%, but you had bough tit at 11%?

Bond prices and yields [ 2 Answers ]

This is the only question I need help with: a. Several years ago, Castles in the Sand Inc. issued bonds at a face value at a yield to maturity of 7 percent. Now, with 8 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has...

View more questions Search