Calculate the liquidity risk premium

Assignment Help Operation Management
Reference no: EM131894397

Question: Tom and Sue's Flowers, Inc.'s, 15-year bonds are currently yielding a return of 8.25 percent. The expected inflation premium is 2.25 percent annually and the real risk-free rate is expected to be 3.50 percent annually over the next 15 years. The default risk premium on Tom and Sue's Flowers' bonds is 0.80 percent. The maturity risk premium is 0.75 percent on 5-year securities and increases by 0.04 percent for each additional year to maturity. Calculate the liquidity risk premium on Tom and Sue's Flowers, Inc.'s, 15-year bonds. (Round your answer to 2 decimal places.)

Liquidity risk premium %

Reference no: EM131894397

Questions Cloud

Find the value of the flags field for a query message : Find the value of the flags field (in hexadecimal) for a query message requesting an address and demanding a recursive answer.
Evaluate research on the basis of its construct validity : Explain in detail the quantitative, qualitative, or mixed methods you plan to employ and what findings you expect these to produce.
Offered some securities for sale to the public : In March 2012, Daniela Motor Financing (DMF), offered some securities for sale to the public.
Thoughts about the role language plays in children : What are your thoughts about the role language plays in children's cognitive development and learning is more in sync with those of Piaget or Vygotsky?
Calculate the liquidity risk premium : Tom and Sue's Flowers, Inc.'s, 15-year bonds are currently yielding a return of 8.25 percent. The expected inflation premium is 2.25 percent annually.
Show how you can find the rtt between two routers : Use the ping program to test a host outside the United States. Show how you can find the RTT between two routers using Exercise 27.
Does desire corrupt and result in pain : Does desire corrupt and result in pain more than it results in pleasure?
What is the minimum time for message to go from one to other : If two computers are 5000 miles apart, what is the minimum time for a message to go from one to the other?
What is the end state of stoicism : What is the end state of Stoicism? Does the "disinterested rational will" ultimately result in a healthy psychological state?

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd