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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
What is the relationship between bond value and its required rate of return?
The value of a bond is inversely related to its required rate of return. When the required rate of return increases, the present value of the bond's future cash flows decreases, leading to a lower bond price. Conversely, if the required rate of return decreases, the bond's present value increases, resulting in a higher bond price. This relationship highlights how market interest rates and bond prices move in opposite directions.
Relationship between risk and return?
risk is pre-stage for return...
Do higher coupon bonds give a higher rate of return?
according to the come rates the returns we get if we purchase higher rated coupon bonds we get higher returns
How do bondholders get a return on zero coupon bonds?
Zero coupon bonds do not pay interest and are therefore sold at a steep discount to face value depending on the maturity date of the bond. Due to the time value of money, the discount on a 30 year zero coupon bond will be much greater than on a 10 year zero coupon bond. At maturity bondholders will receive the full face value of the bond which provides bondholders a return. For example, a 30 year zero coupon bond with a face value of $1,000 and sold for $500 would return a $500 profit after 30 years. Holders of zero coupon bonds can sell the bonds at any time before maturity. If an investor bought zero coupon bonds prior to a steep drop in interest rates, the value of the zero coupon bonds would increase and could be sold at a profit.
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
Does Dividend has no relationship with the value of the firm as per Walter Model.?
According to Walter's Model, the relationship between dividends and the value of a firm is contingent on the firm's internal rate of return (r) compared to the required rate of return (k). If the internal rate of return exceeds the required rate, retaining earnings for reinvestment enhances firm value, suggesting that dividends may detract from it. Conversely, if the required return is greater than the internal rate, paying dividends can increase firm value. Thus, the model suggests a nuanced relationship between dividends and firm value rather than asserting that there is no relationship at all.
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.
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
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
What is the difference between the required rate of return and the expected rate of return in investment analysis?
The required rate of return is the minimum return an investor needs to justify the risk of an investment, while the expected rate of return is the return that an investor anticipates receiving based on their analysis of the investment's potential performance.
