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redemption yield

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › redemption yield

  • This topic has 1 reply, 2 voices, and was last updated 11 years ago by John Moffat.
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  • March 26, 2014 at 4:09 pm #163207
    zee90
    Participant
    • Topics: 6
    • Replies: 17
    • ☆

    what is redemption yield ?

    March 26, 2014 at 5:11 pm #163216
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54684
    • ☆☆☆☆☆

    It is what you might call the overall return to investors (the combination of the interest and any gain/loss on redemption (repayment))

    To calculate it you calculate the IRR of the cash flows to the investor (same as calculating the cost of redeemable debt, only without the tax saving on interest).

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