Do skywalker bonds trade discount or premium

Assignment Help Financial Management

Reference no: EM132050240

1. Skywalker Corporation has bonds trading in the secondary market that mature in 15.00 years. Each bond pays an annual coupon of $93.00 with a face value of $1,000. Investors in Trek Star debt currently seek an 9.00% return. Do Skywalker bonds trade a DISCOUNT or a PREMIUM?

2. Investors predict that Cargo Corporation stock will trade for $32.02 in one year. The company will not pay a dividend in the next year. If you desire a return of 15.00% on Cargo stock, how much are you willing to pay for a share today?

3. You manage a $100 million bond portfolio with a duration of 9 years. You wish to hedge this portfolio against interest rate risk using T-bond futures with a contract size of $100,000 and a duration of 12 years. How many contracts are required?

Reference no: EM132050240

Questions Cloud

The average annualized compounded return of stock : What is the average annualized compounded return of a stock given the information below:

What should hr be doing to prepare for a leadership vacuum : With baby boomers retiring now and over the next decade, what should HR be doing to prepare for a leadership vacuum? What potential problems do you see.

What is the bond real rate of return : In 2017, actual inflation in the economy was 2.10%. What is the bond's real rate of return in 2017?

Define what succession planning process will you use : In a minimum of 800 words, document a succession plan for an employee (e.g., IT Developer, Maintenance Crew, Training Specialist, CEO) in your chosen firm.

Do skywalker bonds trade discount or premium : Investors in Trek Star debt currently seek an 9.00% return. Do Skywalker bonds trade a DISCOUNT or a PREMIUM?

Why is it important to have more than one strategy : What other strategies would be a good fit for your company profile? Provide a brief overview of these strategies.

What is maximum rate the loan can reset : What is the maximum rate the loan can reset to on its 1st reset date?

Considering investment : You are considering an investment in Justus Corporation's stock, what does the market believe will be the stock price at the end of 3 years?

What primary factors led you to the decision : You think about this and say, "There may well be some considerable cultural differences that need addressing. I remember last year when there was a language.

User Account

All Pages