Determine the yield for each rating by adding

Reference no: EM133633224

Question: As lower bond ratings will lead to higher interest costs, you will need to determine those costs. Go to Aswath Damodaran's web page reporting bond spreads by credit ratingLinks to an external site.. You will see a table of bond spreads. These spreads represent the increased yield a bond must pay over the U.S. Treasury. Choose the large-company spread for Home Depot's current rating and the three ratings below it. We will adjust these old spreads to estimate the current 10-year spread.

Since these spreads are dated and averaged across all maturities, you will need to create new yield spreads for the various ratings. Use the current difference between the Home Depot bond's yield and the 10-year Treasury as the true spread for the rating. Using Excel, compute the spreads for the other ratings, by adding the difference in spreads from the table to the new true spread for Home Depot's rating. Finally, determine the yield for each rating by adding the new spread to the yield on the 10-year Treasury bond.

Reference no: EM133633224

Questions Cloud

Discuss engagement strategies that can promote value of ebp : Share what you have learned in these areas. Discuss engagement strategies that can promote value of EBP implementation within your organization.

Cardiac patient differ from the younger cardiac patient : In which way does the older cardiac patient differ from the younger cardiac patient? The cardiac output tends to be increased in the older cardiac patient.

Discuss the ethical principles of confidentiality : Discuss the ethical principles of confidentiality and privilege in the context of pastoral counseling.

Does the priest forgive your sins or does god : In a Catholic Church, does the priest forgive your sins or does God? How does this work? in what ways can it be beneficial to confess sins to a priest?

Determine the yield for each rating by adding : Determine the yield for each rating by adding the new spread to the yield on the 10-year Treasury bond

Choose designated racial health disparity : Choose a designated racial health disparity. Describe how specific Scripture Applies.

How does agility allow us to pivot for success in terms : How does agility allow us to pivot for success in terms of the value of our time and the risks and opportunity costs of every decision we make?

Primary factor leading to underutilization of formal home : The primary factor leading to underutilization of formal home and community-based services and nursing homes by minority elders

What component of trauma triad of death is likely to begun : A patient who sustained severe injuries was brought. What component of the trauma triad of death is most likely to have begun at the time of injury?

User Account

All Pages