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Redemption date |
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Redemption dateThe actual date on which repayment of a bond or loan stock takes place.Redemption dateThe date on which a bond matures or is redeemed.Redemption date Similar MatchesGross redemption yieldGross redemption yieldSee 'redemption yield'. Redemption chargeRedemption chargeThe commission a mutual fund charges an investor who is redeeming shares. For example, a 2% redemption charge (also called a back end load) on the sale of shares valued at $1000 will result in payment of $980 (or 98% of the value) to the investor. This charge may decline or be eliminated as shares are held for longer time periods. Redemption yieldRedemption yieldYield calculations on bonds aim to show the return on a gilt or bond as a percentage of either its nominal value or its current price. There are three types of yield calculation that are commonly used:Nominal YieldThis is calculated by dividing the annual income on the bond by its nominal or 'par' value. So the nominal yield on a £100 bond which pays 5% interest per year is 5/100 x 100 = 5%.Current or 'Running Yield'This is calculated by dividing the annual income on the bond by its current market price. So if the market price of the £100 bond dropped to £95, the current yield on the bond at that time would be 5/95 x 100 = 5.36%. Note that as the market price of a bond drops, its yield goes up.Redemption Yield'The Redemption Yield shows what the total return on a bond would be if held to its maturity date. It reflects not only the interest payments a bondholder will receive, but also the gain/loss he will make when it matures. The income element is the same 'current yield' calculation performed above. The gain/loss element is calculated by taking the difference between the current market price and the nominal value of the bond (e.g. in our example 100 - 95 = 5), dividing it by the number of years til maturity (assume 5 years for simplicity, so 5/5 = 1) and then dividing that figure by the current price of the bond (1/95 x 100 = 1.05%) The yield to redemption is the sum of the current yield (5.36%) and the capital yield (1.05%) = 6.41%. RedemptionRedemptionThe process of canceling a defeasable title to land, such as is created by a mortgage foreclosure or tax sale. Redemption feeRedemption feeA fee some mutual funds charge when an investor sells shares within a specified short period of time. Further SuggestionsredemptionPreferred equity redemption stock (PERC) Overhanging redemption penalty redemption fees Redemption penalties Redemption price Redemption Serial redemption Redemption statement redemption price Redemption Mandatory redemption schedule Redemption Period Right of redemption Redemption cushion Extended redemption penalty Redemption penalty overhang right of redemption |
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