The securitys liquidity risk premium is 25 percent and

Assignment Help Finance Basics
Reference no: EM13566216

A particular security's equilibrium rate of return is 8 percent. For all securities, the inflation risk premium is 1.75 percent and the real interest rate is 3.5 percent. The security's liquidity risk premium is .25 percent and maturity risk premium is .85 percent. The security has no special covenants. Calculate the security's default risk premium.

Reference no: EM13566216

Questions Cloud

The questions in this exercise are based on fedex : the questions in this exercise are based on fedex corporation. to answer the questions you will need to download fedexs
Below are the adjusted accoutns of jims electrical service : below are the adjusted accoutns of jims electrical service for the month ended may 31 2013accts. payable 600accts. rec.
If the price level falls next year remaining fixed : if the price level falls next year remaining fixed thereafter and the money supply is fixed what is likely to happen
Jean kelly opened a dance school called jeans dance studio : prepare journal entries for the following transactions. if no entry is required write no entry omit explanations.mar.1.
The securitys liquidity risk premium is 25 percent and : a particular securitys equilibrium rate of return is 8 percent. for all securities the inflation risk premium is 1.75
Cpm construction plans to buy a truck for 150000and sell it : cpm construction plans to buy a truck for 150000and sell it for 15000 at the end of 5 years. the annual operating cost
From the following alphabetical list of account balances : from the following alphabetical list of account balances all of which are normal for kasper company on july 31 2010
Corporation acquired equipment for 260000 the estimated : corporation acquired equipment for 260000. the estimated life of the equipment is 5 years or 40000 hours. the estimated
Use the following accounts and information to prepare in : use the following accounts and information to prepare in good form an income statement statement of retained earnings

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the arithmetic mean annual rate of return

During the last five years, you owned two stocks that had the following yearly rates of return, Calculate the arithmetic mean annual rate of return for every stock.

  Compute the contribution margin and fixed costs

Tyson Corporation bottles and distributes LO-KAL, a fruit drink. The beverage is sold for fifty cents per 16-ounce bottle to retailers, who charge customers 70 cents each bottle.

  What is its economic value added

Net operating profit after taxes (NOPAT) = $700; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Total operating capital = $2,100. ABC's weighted average cost of capital is 10%. What is i..

  What is the standard deviation of these returns

A Stock has produced returns of 11 percent, 18 percent, -6 percent,-13 percent, and 21 percent for the past 5 years, respectively. What is the standard deviation of these returns?

  What is quigley wacc

The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new stock. What is Quigley's WACC?

  Determination of stock prices

The market consists of the following stocks. Their prices and number of shares are as follows:

  Dividends are considered regular

dividends are considered regular and dividend is not likely to be repeated.

  What is the cross-rate of swiss francs to euros

Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.41 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.00 = 1.64 euros. What is the cross-rate of Swiss francs to euros?

  How do interest rates affect the optimal order quantity q

How do interest rates affect the optimal order quantity Q*?

  What problems may be indicated by an average collection

what problems may be indicated by an average collection period that is substantially above or below the industry

  The company keeps 15 of the next months sales as ending

sargent.com plans to sell 2000 purple lawn chairs during may 1900 in june and 2000 during july. the company keeps 15

  A firm pays a 480 dividend at the end of year one d1 has a

a firm pays a 4.80 dividend at the end of year one d1 has a stock price of 80 and a constant growth rate g of 5

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