The yield would be 15.38%.
You would need to know a Yield To Maturity to answer this question.
if you received 85.0 percent back from your product then your percent yield is 85 percent.
The yield curve is the relationship between an interest rate and the time to maturity for a given debt. Typical debts may be U.S. Treasury debt instruments (T-Bills, T-Notes, etc.) or the LIBOR lending rate. A yield curve is normally upward sloping, where short term lending would pay a lower rate (since it incurs less risk on the part of the borrower) compared to longer term lending (which places more risk on the borrower). In general the longer amount of time the lender loans money, the more that it earns as a result. However, yield curves -- adjusted daily -- can vary in their shape depending on current economic conditions, long term market outlook, etc. A yield curve describes the 'yield to maturity' of a collection of similar bonds (rating wise) with different periods to maturity. (src below)
why don't reactions give us a 100 percent yield?
A fee paid by a mortgage holder as a prepayment premium in order to attain the same yield they would have if they had paid all payments to maturity.
Compute the current price of the bond if percent yield to maturity is 7%
The issuer will call the bonds and issue new bonds to the maturity date.
The yield to maturity represents the promised yield on a bond
4 years
as yield to maturity increases the bonds price decreases, because a higher yield to maturity means its riskier to investors
After cost of debt = 12% x (1-0.35) = 7.8%
A yield curve is a graph that shows the relationship between yield and maturity on bonds. The graph plots the time or maturity on the x-axis and the yield on the y-axis. The yield curve will show how the yield on the bond changes with varying maturities.
The different types of yields on bonds include current yield, yield to maturity, yield to call, and yield to worst. Current yield is the annual interest payment divided by the bond's current price. Yield to maturity is the total return anticipated on a bond if held until it matures. Yield to call is the yield calculation if a bond is called by the issuer before it matures. Yield to worst is the lowest potential yield that can be received on the bond.
When the yield of a bond exceeds it coupon rate, the price will be below 'par' which is usually $100.
Callable bonds will pay a higher yield than comparable non-callable bonds. Take from answers.com
Bonds are valued by discounting the coupon payments and the final repayment by the yield to maturity on comparable bonds. The bond payments discounted at the bond’s yield to maturity equal the bond price. You may also start with the bond price and ask what interest rate the bond offers. This interest rate that equates the present value of bond payments to the bond price is the yield to maturity. Because present values are lower when discount rates are higher, price and yield to maturity vary inversely.
Yield usually refers to yield to maturity. If a bond is trading at par it usually means the yield to maturity is equal to the coupon.