Purchase Solution

Canadian Pacific Limited's debentures: determine YTM

Not what you're looking for?

Ask Custom Question

Recently the high and low market prices of Canadian Pacific Limited's debentures (4 %) were $790 and $475 respectively. Determine the yield-to-maturity of one of these debentures if it was purchased under the following conditions:

a. at the high market price
b. at the low market price

Purchase this Solution
Solution Summary

The solution explains the formulas and calculations to arrive at the correct answer.

Solution Preview

Since there is no maturity date, the yield to maturity is simply the coupon yield (4%) times the par value ...

Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Introduction to Finance

This quiz test introductory finance topics.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

View More Free Quizzes
Related BrainMass Solutions

  • Bond Valuation

    148088 Determine the price of a Canadian government bond Determine the price of a Canadian government bond as of January 1, 2007 with face value F=$1000, YTM of r=5%, a semi annual coupon of 6.375% if the bond matures on December 31, 2011.

  • WACC Calculations with Equity, Debt, and Market Value

    The face value of debentures is £1. If the face value is different, then the market value will change and the total capital amount will change (the YTM remains the same).

  • MCQs on Bonds

    For a premium bond: Coupon > Current Yield > YTM For a par bond: Coupon = Current Yield = YTM For a discount bond: Coupon < Current Yield < YTM a is incorrect because for a premium bond, the capital

  • Weighted Average Cost of Capital

    Debentures The price of the debentures will be the present value of interest and principal discounted at the YTM. The annual interest is 800,000X8%=64,000 and is an annuity. Principal amount is 800,000.

  • Bond price

    193340 Theoretical market value using semiannual analysis: Pacific Western Corporation Pacific Western Corporation pays an 11 percent coupon rate on debentures that are due in 20 years.

  • Union Pacific Corporation Case Study: Company Analysis

    Railroad Industry Players Ranked by Market Capitalization Company Name Market Traded Ticker Market Value-Total ($M) UNION PACIFIC CORP. NYSE UNP 47,056.53 CANADIAN NATIONAL RAILWAY COMPANY NYSE CNI 33,740.92 NORFOLK SOUTHERN CORP.

  • basic characteristics of preferred shares

    Canadian savings bonds, perferred vs common stock, and the causes of poor inventory turnover

  • Country Risk

    Some of your competitors in Canada are Starfield's Limited, Pacific Apparel Inc. Intiirmode Canada Inc. and Famous Neckware Manfacturing Inc. B. What are the Market risk's the (4 P's). Each of the 4 Ps risks is very high: 1.

  • Yield, Price, Callable, Risk, Discount, Value and Interest

    Since the bonds have the same YTM, they should all have the same price, and since interest rates are not expected to change, their prices should all remain at their current levels until maturity. c.

View More Related Solutions