On January 1, 2017. Alpha Inc. issued a 10-year bond. The bond featured an annual 8% coupon ($80 once a year) and a par value of $1.000. Within minutes of issuing the bond. Alpha announced financial problems, and the terms of the bond were renegotiated overnight. Going forward. Alpha will only pay a 6% coupon ($60 once a year) and $800 at maturity. The YTM rose to 21.00% on January 2, 2017. Being an astute hedge fund manager, you decide to buy the bond at its now depressed price, looking to earn a high (but risky) yield. Assuming Alpha can deliver on the new renegotiated cash flows. what is your expected capital gain yield for the first year? 4.89% 4.40% 4.09% 3.72% O 3.25%

On January 1, 2017. Alpha Inc. issued a 10-year bond. The bond featured an annual 8% coupon ($80 once a year) and a par value of $1.000. Within minutes of issuing the bond. Alpha announced financial problems, and the terms of the bond were renegotiated overnight. Going forward. Alpha will only pay a 6% coupon ($60 once a year) and $800 at maturity. The YTM rose to 21.00% on January 2, 2017. Being an astute hedge fund manager, you decide to buy the bond at its now depressed price, looking to earn a high (but risky) yield. Assuming Alpha can deliver on the new renegotiated cash flows. what is your expected capital gain yield for the first year? 4.89% 4.40% 4.09% 3.72% O 3.25%

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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