Is the coupon rate or yield rate paid on a bond?

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Coupon rate
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If treasury bonds yield 6 percent and Carter's marginal income tax rate is 40 percent what yield on the Chicago municipal bonds would make Carter's treasurer indifferent between the two?

Answer . \nmuni yield must equal 10% to be equal to the tax shield 6 percent of the treasury yield. 100(muni yield) = 100(t-yield)/(1-(marginal tax))\n. \n100x = 100x .06/(1-.40)\n. \n100x = 100x .06/0.6 divide both side by 100\n. \nx = .06/0.6\n. \nx= 0.10\n. \nmuni rate equals 1 ( Full Answer )

What is the difference between rate and yield?

Answer . Rate is the specified interest rate paid on a financial instrument (such as a bond). The interest is calculated by applying the rate to the face value of the instrument.. The yield is calculated by dividing the interest amount received by the price paid for the investment, and the time ( Full Answer )

A 5-year corporate bond yields 8 percent a 5-year municipal bond of equal risk yields 6 percent the state tax rate is 0 at what federal tax rate are you indifferent between bonds?

To find the federal tax rate at which the buyer would be indifferent between Muni bonds(which are tax free) and Corporate bonds(which fall under your tax bracket tax rate) you follow this simple formula:. Corporate Bond Yield=(Municipal bond Yield)/(1- Federal tax rate). In this case you would sol ( Full Answer )

What is coupon rate?

Coupon rate is simply just the annual coupon payments paid by the issuer relative to the bond's face or par value. Coupon rate can be calculated by dividing the sum of the security's annual coupon payments and dividing them by the bond's par value. For example, a bond which was issued with a face v ( Full Answer )

What is the yield to maturity for a bond that has 10 years until maturity and a coupon rate of 8 sells for 1100?

YTM= 6.602%. ------------------------------------------------------------------------------------. I got a different answer, I got YTM 6.67% . 80 - 10 (80 coupon -100 cap loss / 10 years) __________________ 1,110 + 1,000 / 2 (purchase price + 1,000 par /2) . therefore, 70 / 1,050 = 6 ( Full Answer )

What is the relationship between coupon rate on a bond and security provisions?

Coupon Rate: The actual interest rate on the bond, usually payable in semiannual installments. The coupon rate normally stays constant during the life of the bond and indicates what the bondholder's annual dollar incomes will be. Bond Security Provisions: . Secured Debt: Specific assets are p ( Full Answer )

What is relationship between a bond coupon rate and its duration?

bond coupon rates and yield rates have very similar effects and a very similar relationship to duration, lemme explain, by first explain durations effects in relation to interest rates, then yields and finally you can surmise that relationship between yield rates will be the same as coupon rates . ( Full Answer )

What's the dividend yield capital gains yield and the expected rate return of the stock with preferred stock at eight dollar annual dividend to be paid in perpetuity a discount rate is twelve percent?

Dividend yield . The dividend yield on a company stock is the company's annual dividend payments divided by its market cap, or the dividend per share divided by the price per share. It is often expressed as a percentage. . Contents\ . 1 Preferred share dividend yield . 2 Common share div ( Full Answer )

Why do the coupon rates for various bonds vary so much?

Coupon rates are likely to vary when they are being traded in different markets with different interest rates. There will also be a variation in rates due to the different risk levels of of different bonds.

If two bonds have the same maturity the same yield to maturity and the same level of risk the bonds should they sell for the same price regardless of the bond's coupon rate?

if two bonds offer the same duration and yield, then an investor should look at their levels of convexity. if one bond has greater convexity, it is less affected by interest rate changes. also, bonds with higher convexity will have higher price than bonds with lower convexity regardless whether inte ( Full Answer )

What is the difference between discount rate and coupon rate?

For this answer we have to know the six categories of premioum: a. Inflation premium(more risk): high inflation means tha investors will require a higher return in order to invest at a certain project. b. Maturity premium: the longer the duration of a project, the higher the return that investors wi ( Full Answer )

What are the contract rate and the market rate for bonds?

Contract rate is known as a coupon rate (because older securities actually had coupons that were clipped and sent to paying banks for periodic interest). It is the fixed rate of interest for which a particular bond was issued. Market rate is actually known as yield (prevailing interest rate for n ( Full Answer )

How does the yield to maturity on a bond differ from the coupon yield or current yield?

The rate of return anticipated on a bond if held until the end ofits lifetime. YTM is considered a long-term bond yield expressed asan annual rate. The YTM calculation takes into account the bond'scurrent market price, par value, coupon interest rate and time tomaturity. It is also assumed that all ( Full Answer )

Difference between coupon rate and yield to maturity?

The coupon rate is the actually stated interest rate. This is the rate earned on a NEW issue bond. The yield to maturity takes into consideration the purchase price of a bond bought in the secondary market. For example, if you buy a $1,000 bond for $1100 which matures in 10 years and has a coupon of ( Full Answer )

Are interest rate and coupon rate the same?

Actually they mean the same thing but they are used in two totally different situations. Interest Rate is the money paid by a bank that has accepted a deposit from a Customer. Coupon Rate is the money paid by a person who has issued Bonds to people in return for the money they have given him.

What is the relationship between coupon rate and bond price?

The Bond price is the amount of the bond when it becomes mature. The coupon rate is the amount of interest payable on the bond. Bonds have three major components The first is the face value (also called par value). This is the value of the bond as given on the certificate or instrument. This is ( Full Answer )

At what rate are concrete masons paid?

Cement masons and concrete finishers earned an average hourly wage of $14.74, while terrazzo workers earned $13.42 per hour

What are the interest rates for zero coupon bonds?

They pay no 'coupon' which is the income paid periodically. You make a return by buying at a discount. As an example, if you buy a zero coupon bond for $86.26, maturing at $100 over 5 years, you would earn 3% p.a.

Are basketball paid an hourly rate?

Yes, many basketballs are, however I would suggest being a baseball or football, because their rates are typically higher.

When does coupon rate exceed coupon yield?

There are a lot of sites that provides coupon codes on onlineshopping or ordering food. I'm using that offersamazing coupons and cashback as well on your shopping. You can usethat cashback as a free recharge. Try this once.

When the market rate of return for a particular bond is much less than its coupon rate the bond is selling at?

If the current interest rate is lower than the coupon rate, a bondwill be priced at a premium. For example, a bond originally issuedat par with a 5% coupon would initially yield 5% to an investor. Ifmarket rates subsequently dropped to 3%, the bond would be sellingat a premium to reflect the lower i ( Full Answer )

Where can one find a Bond funds that yield a high interest rate?

You can find the interest rates on Bond funds by looking up the bond you are interested in sites such as Bloomberg and Yahoo Finance. If you want to sort them out by interest rate (e.g. highest first) then you can do that too.

Where can high yield CD rates be found?

One can find high yield CD rates on many different websites. The sites Bankrate and Bankaholic both compare several different Certificate of Deposit rates.