What is the Average Yield on High-Grade Corporate Bonds as of Now?
Yahoo! Finance would list it as 3.30 for the 20 year corporate AAA bonds. This is using the criteria from the Wikipedia link you stated in the initial question.
I wrote one to check against the N3 to N6 bonds: http://capitalmind.in/2011/03/sbi-bond-yield-calculator/ Things to note: In addition to the other answers, also consider this: Federal bond interest rates are nowhere near the rates you mentioned for short term bonds. They are less than 1% unless you're talking about terms of 5-10 years, and the rates you mentioned are for 10 to 30-years terms. Dealer financed car loans are usually 2-5 years (the shorter the term - the lower the rate). In addition, as said by others, you pay more than just the interest if you take a car loan from the dealer directly. But your question is also valid for banks. A 20% dividend yield in most companies would make me very suspicious. Most dividend yields are in the 2-3% range right now and a 20% yield would make me worry that the company was in trouble, the stock price had crashed and the dividend was going to be cut, the company was going to go out of business or both. The yield on Div Data is showing 20% ((3.77/Current Price)*100)) because that only accounts for last years dividend. If you look at the left column, the 52 week dividend yield is the same as google(1.6%). This is calculated taking an average of n number of years. The data is slightly off as one of those sites would have used an extra year. "Thanks!  Do you know how to calculate the coefficients from this part?:  ""The difference between the one-year rate and the spread coefficients represents the response to a change in the one-year rate. As a result, the coefficient on the one-year rate and the difference in the coefficients on the one-year rate and spread should be positive if community banks, on average, are asset sensitive and negative if they are liability sensitive. The coefficient on the spread should be positive because an increase in long-term rates should increase net interest income for both asset-sensitive and liability-sensitive banks.""  The one-year treasury yield is 1.38% and the ten-year rate is 2.30%.  I would greatly appreciate it if you have the time!" "Negative Yields on Bonds is opposite of Getting profit on your investment. This is some kind of new practice from world wide financial institute.  the interest rate is -0.05% for ten years. So a $100,000 bond under   those terms would be ""discounted"" to $100,501, give or take. No, actually what you are going to get out from this investment is after 10 years when this investment is mature for liquidation, you will get return not even your principle $100,000 , but ( (Principle $100,000) minus (Negative Yields @ -0.05) Times ( 10 Years ) ) assume the rates are on simple annual rate.  Now anyone may wander why should someone going to buy this kind of investment where I am actually giving away not only possible profit also losing some of principle amount!  This might looks real odd, but there is other valid reason for issuing / investing on such kind of bond.  From investor prospective: Every asset has its own 'expense' for keeping ownership of it. This is also true for money/currency depending on its size. And other investment possibility and risk factor. The same way people maintain checking account with virtually no visible income vs. Savings account where bank issue some positive rate of interest with various time factor like annually/half-yearly/monthly. People with lower level of income but steady on flow choose savings where business personals go for checking one. Think of Millions of Ideal money with no secure investment opportunity have to option in real. Option one to keeping this large amount of money in hand, arranging all kind of security which involve extra expense, risk and headache where Option two is invest on bond issued by Government of country. Owner of that amount will go for second one even with negative yields on bonds where he is paying in return of security and risk free grantee of getting it back on time.  On Issuing Government prospective: Here government actually want people not to keep money idle investing bonds, but find any possible sector to invest which might profitable for both Investor + Grater Community ultimately country.  This is a basic understanding on issue/buy/selling of Negative interest bearing bond on market.   Hope I could explain it here. Not to mention, English is not my 1st language at all. So ignore my typo, grammatical error and welcome to fix it.  Cheers!" There is no single 'market interest rate'; there are myriad interest rates that vary by risk profile & term. Corporate bonds are (typically) riskier than bank deposits, and therefore pay a higher effective rate when the market for that bond is in equilibrium than a bank account does. If you are willing to accept a higher risk in order gain a higher return, you might choose bonds over bank deposits. If you want an even higher return and can accept even higher risk, you might turn to stocks over bonds. If you want still higher return and can bear the still higher risk, derivatives may be more appealing than stocks. "You sound like you know what you're talking about, but you say:  ""foreign buyers will laugh at them""  But the Wall Street Journal, 9/20/12, says that in the last quarter FOREIGN INVESTORS ARE FLOCKING TO BUY JAPANESE BONDS IN RECORD LEVELS even though the yields are very much below other industrialized countries. LOL" "Wrong. Business lending has boomed under QE.. does the term ""cov-lite"" sound familiar? That's because there's so much liquidity, that they're willing to lend to companies with little to no restrictions. There is so much credit to go around, that a ""High Yield Bond"" can price at L+800 bps.   When you're taking all the risk of a HY issuer, and maxing your return at 8.5%-9%, it's not too appealing. Instead, you could take a bit more risk, but also get all of the potential upside of equities.   1.  Fed buys assets, injects money into banks.   2.  Banks, flush with liquidity, need to put their balance sheet to use and begin lending to everyone.   2.  Bond market flooded with supply, causes bond yields to drop to historic lows.     3.  Investors don't enjoy limiting upside for incredibly low returns, and begin flooding equity markets to get some sort of yield.    Business lending is booming, making equities the only place to get larger returns." Hi guys, I have a difficult university finance question that’s really been stressing me out....  “The amount borrowed is $300 million and the term of the debt credit facility is six years from today  The facility requires minimum loan repayments of $9 million in each financial year except for the first year.  The nominal rate for this form of debt is 5%. This intestest rate is compounded monthly and is fixed from the date the facility was initiated.  Assume that a debt repayment of $10 million is payed on 31 August 2018 and $9million on April 30 2019. Following on monthly repayments of $9 million at the end of each month from May 31 2019 to June 30 2021.  Given this information determine the outstanding value of the debt credit facility on the maturity date.”  Can anyone help me out with the answer? I’ve been wracking my brain trying to decide if I treat it as a bond or a bill.  Thanks in advance, There was this /r/offmychest post yesterday from a person claiming to work for a large investment bank as part of their default risk modelling team. The poster claims that the commercial and real estate lending divisions have been fudging numbers regarding default risks due to a lack of oversight and a bunch of bad commercial loans are about to become due. They further claim that a rise in interest rates could prevent many commercial properties from being able to properly ~~finance~~ refinance their loan. Here is the post: https://www.reddit.com/r/offmychest/comments/77a1vw/i_work_in_bankingfinance_risk_management_i_am/. Any one have any thoughts?            I also found this link on the Mises blog (though it is a year old) that discusses how delinquency rates on commercial and industry loans have been steadily rising since bottoming out in 2015: https://mises.org/blog/delinquency-rates-rising-new-crisis-approaching. Could be something to keep an eye on. I would love to see some more updated data on delinquency. "I figured that there must be some people in a corporate office somewhere who sign $100M loans for lunch. :)  The banks have that experience (but I'm not interested in asking them for a sample), and our consultants definitely have that experience, but I'm looking to evaluate the consultants with this exercise. If they provide the sample, then deliver to that sample, I'm still blind as to whether that sample is ""good"" as compared to something that the corporate world would use on the daily.  I'd take your advice for the $1M loan, but I can't help but think as the factors of 10 increase, the data required to properly negotiate also increases. I don't want to go in blind, and provide a proposal that looks like a high school project." i will not calculate it for you but just calculate the discounted cash flow (by dividing with 1.1 / 1.1^2 / 1.1^3   ...)of each single exercise as stated and deduct the 12.000 of the above sum.  in the end compare which has the highest npv I've recently discovered that Morningstar provides 5yr avgs of a few numbers, including dividend yield, for free.  For example, see the right-hand column in the 'Current Valuation' section, 5th row down for the 5yr avg dividend yield for PG: http://financials.morningstar.com/valuation/price-ratio.html?t=PG&region=usa&culture=en-US Another site that probably has this, and alot more, is YCharts.  But that is a membership site so you'll need to join (and pay a membership fee I believe.)   YCharts is supposedly pretty good for long-term statistical information and trend graphs for comparing and tracking stocks. "I kind of understand the ""basics"", and have done a couple (with the assistance of pre-made excel sheets haha), I just don't feel that I'm creating an actual valuable valuation when I do one. While on the topic though, do you know where an individual investor can calculate the cost of debt for the WACC? I've been looking on morningstar and search up that public company and take the average of the coupon on all outstanding bonds. I don't feel like that's very correct though :("