Understand what long-term debt is, examine the long-term debt formula, know how to calculate long-term debt, and see examples. Related to this QuestionWhat is the YTM of a STRIPS maturing in 25 years if its ask price quote is 18.656?What is the YTM...
What is the simple payback period formula?Return On Investment:Return on investment or ROI simply means how much money have you put (also known as cash-in) in a business, project, or investment and how much returns (also known as cash-out) do you get out of it. ROI is generally ...
This rule of thumb is so old it belongs in a rest home. But it’s still got legs because it helps you to work out how your age affects your pension portfolio decisions: Subtract your age from 100. The answer is the portion of your portfolio that resides in equities. ...
While interest rates on existing debt are technically the company’s current cost of debt, WACC is a forecasting calculation. Those interest rates may not represent the company’s future borrowing power. Instead, using the average yield to maturity (YTM) on the company’s long-term debt is mo...
What is the maturity value of a $260,000, 43-day, 11.1% note receivable? Maturity Value: The maturity value of a note is the face value plus any interest it pays. To calculate the maturity value, you must use the interest formula and adjust it to reflect the terms of the...
The discounting factor is known as the Yield to Maturity, and it is calculated using the current market return from an investment with a comparable risk profile. R stands for the YTM (Yield to Maturity). The present value of the first coupon payment, the second coupon payment, the third co...
To calculate the price of a zero-coupon bond, you can use the following formula: In this calculation, YTM is the interest rate you’d like to see from the bond, while n refers to the number of years until maturity. Suppose you wanted to buy a hypothetical zero-coupon bond, and ...
Yield to maturity (YTM)is a special measure of the total return expected on a bond each year if the bond is held until maturity. It differs from nominal yield, which is usually calculated on a per-year basis and is subject to change with each passing year. On the other hand, YTM is ...
The YTM is a snapshot of the return on a bond because coupon payments cannot always be reinvested at the same interest rate. As interest rates rise, the YTM will increase; as interest rates fall, the YTM will decrease. Investors can approximate YTM using a bond yield table, financial calcu...