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Forum Archive Index - June 2003

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[sharechat] Capital Notes & yeild

From: "Peter Hargraves" <peter@qcgroup.co.nz>
Date: Mon, 30 Jun 2003 11:16:15 +1200

Title: Memo
 

 Can someone help me with the calculation of the return or yield from a capital notes purchase?

 

Details:

 

Face value $30,000 at 8.5% yield.

 

Total purchase cost is $30,351.70

 

Advised this includes $103.94 accrued interest plus $248.68 brokerage at a "net return" of 8.37%

 

No way can I make these figures add up.

 

If I subtract the accrued interest & the brokerage I get $29,998.64 paid for a note that has a face value of $30,000 at 8.5%. Surely my return is greater than 8.5%??

 

How does this work?What am I missing?

 

Regards

Peter H.

 

 

 

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