Which one does an investor want to be higher the going-in


1. Which one does an investor want to be higher, the “going-in” or the “going-out” cap rate? Why?

2. Calculate the yield to maturity (YTM) of the perpetuity, by which investors get fixed coupon payments of $2000 annually when the market price is $45,000.

3. A mutual fund manager purchased a zero coupon bond with a face value of $1,000. If the bond matures in 7 years and the price to purchase the bond was $785, what is the yield inferred by this information?

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Financial Management: Which one does an investor want to be higher the going-in
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