Reference no: EM13921038
1) If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 8.5%, the maturity risk premium on all 10-year bonds is 1.3%, and corporate bonds have a 0.4% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond?
2) Assume we make a valuation of the same bond 5 years from now. Required rate of return did not change. Find the present value of all future payments, including par value, that will be paid to the investor 15 years from now.
3) How the value of the bond will change 5 years from now if the required rate of return change to 16%?
4) How the value of the bond will change 5 years from now if the required rate of return change to 12%?
5) Consider a bond of 10 years before the maturity, 14% coupon rate paid semiannually, 12% required return, $1000 par value. Find PV?
6) Suppose we are offered a 10-year, 11% annual coupon, $1000 face value bond at a price of $1200. What rate of interest would you earn on your investment if you bought the bond and held it to maturity?
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Are small jobs less profitable than they were in the past
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Find the balance of the loan right
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Required return on the riskier stock exceed
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Required rate of return on a stock with beta
: Assume that the risk-free rate is 6% and that the market risk premium is 8%. What is the required rate of return on a stock with a beta of 1.3?
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Assume we make a valuation of the same bond
: Assume we make a valuation of the same bond 5 years from now. Required rate of return did not change. Find the present value of all future payments, including par value, that will be paid to the investor 15 years from now. How the value of the bond w..
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The beta associated with a risk free asset
: The beta associated with a risk free asset ___.
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What is the dividend yield and the capital gains yield
: Assume, the stock is sold for $10.50. The dividend just paid is $1 and expected to grow at the rate of 5% annually. What is the required return? What is the dividend yield? What is the capital gains yield?
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What is the price of the bond now
: Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 5.0%. Now, with 5 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has in..
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What will be the price of each bond if their yields increase
: Consider three bonds with 5.3% coupon rates, all making annual coupon payments and all selling at a face value of $1,000. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has matur..
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