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Q: What is the relationship between required rate of return and coupon rate on the value of a bond?
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Relationship between required rate of return and coupon rate on the value of a bond?

required rate of return is the 'interest' that investors expect from an investment project. coupon rate is the interest that investors receive periodically as a reward from investing in a bond


Difference enters bond's coupon interest rate the current yield y bond-holder's required rate of return?

Difference enters bond's coupon interest rate the current yield y bondholder's required rate of return?


If Cabell Corp bonds pay an annual coupon rate of 10 percent and the investors required rate of return is now 8 percent on these bonds what will be the price?

par value


What happens when you get negative market returns can you use that to compute the required rate of return using CAPM?

A negative market return means that there has been a loss on investments because stocks have gone down. CAPM is a model that describes the relationship between risk and expected return and could be used to try to foresee negative market returns.


Explain why a characteristic of an efficient market is that investments in that market have zero NPVs?

On average, the only return that is earned is the required return-investors buy assets with returns in excess of the required return (positive NPV), bidding up the price and thus causing the return to fall to the required return (zero NPV); investors sell assets with returns less than the required return (negative NPV), driving the price lower and thus the causing the return to rise to the required return (zero NPV).

Related questions

Show the relationship between required rate of return and coupon rate on the value of a bond?

bal amar pel


Relationship between required rate of return and coupon rate on the value of a bond?

required rate of return is the 'interest' that investors expect from an investment project. coupon rate is the interest that investors receive periodically as a reward from investing in a bond


What is the relationship between wacc and discount rate of return?

relationship between WACC and required rate of return.


What is the difference between yield and coupon rate?

The difference between the coupon rate and the required return of a bond is dependent upon the type of bond. Junk bonds will have the biggest difference between its return and the coupon rate.


Difference enters bond's coupon interest rate the current yield y bond-holder's required rate of return?

Difference enters bond's coupon interest rate the current yield y bondholder's required rate of return?


Relationship btwn an investor's required rate of return and value of security?

Relationship btwn an investor's required rate of return and value pf security


Relationship between risk and return?

risk is pre-stage for return...


Calculate the value of a 100 debenture in perpetuity the debenture pays a coupon rate of 11 percent and the required rate of return is 9 percent per year?

122.22


When it comes to investing what is the usual relationship between risk and reward?

When it comes to investing, one general relationship between risk and reward is that taking more risk is associated with a greater return. However, in many cases there is no relationship between the two. For example, even though stocks tend to have a higher return than bonds, taking that risk does not guarantee a better return.


Is there any relationship between return on equity and dividend yield?

if there is no growth in a firm the return of equity is equal to the dividend yield


If Cabell Corp bonds pay an annual coupon rate of 10 percent and the investors required rate of return is now 8 percent on these bonds what will be the price?

par value


What is the meaning of the word nationality?

Nationality refers to the legal relationship between an individual and a state, typically indicating the country to which a person belongs, has allegiance or citizenship. It can also refer to the cultural or ethnic identity of a person or group related to a specific nation or country.