'Yield to maturity' means the rate of return earned on security if it is held till maturity. This can be presented in a graph called 'yield to maturity curve' which represents the interest rates and the maturity of a security. The term structure of interest rates refers to the way in which the yield on a security varies according to [...]
In this article we will discuss about the factors determining yields on stock of a firm. Also learn about the computation of yields on stock. Factors Determining Yields: The general level of yields on stocks is determined by a complex of factors. I. Level of Interest Rates: A change in interest rates will affect security prices and yields as follows: [...]
Learn how to calculate present value and discount factors of investment of a firm. Calculation of Present Value: It is a method of assessing the worth of an investment by inverting the compounding process to give present value of future cash flows. This process is called “discounting”. The present value of 'P' of the amount 'A' due at the end [...]