Yield to maturity is the expected or anticipated rate of return on a bond if it is held until the maturity date. Many investors do not understand yield to maturity and how it is calculated. There are various factors used to calculate the yield to maturity, the calculation involves the current market price, coupon interest rate, par value and time to maturity. It is considered as a long-term bond yield expressed as an annual rate. The yield to maturity is an assumption that the bond will be held until maturity, that all the principle and coupon payments will be made and coupon payments will be reinvested at the bond’s promised yield at the same rate as invested. In other words, it is a measurement of the return of the bond.
Understanding Yield To Maturity
June 17th, 2008 · No Comments
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Convertible Bonds - Minimizing Negative Investor Interpretation
May 5th, 2008 · No Comments
Convertible bonds, sometimes also called as CVs or convertibles, are bonds that can be converted into a predetermined amount of the company’s equity at certain time during its life, usually at the discretion of the bond holder. In other words, a convertible bond gives the holder the right to convert or exchange the par amount of the bond for common shares of the issuer at some fixed ratio during a given period. The best part of convertibles is that it gives the investors the features of equity securities
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