What is the appropriate bond price today

Assignment Help Financial Management
Reference no: EM131235345

1. What would it take for a bond to have a larger risk premium than default premium?

2. A corporate zero-bond promises 7% in 1 year. Its market beta is 0.3. The equity premium is 4%; the equivalent Treasury rate is 3%. What is the appropriate bond price today?

Reference no: EM131235345

Questions Cloud

How do the social institutions of our country play a role : How do the social institutions of our country (e.g., schools, the healthcare system, the economy, religious organizations) play a role in encouraging social conformity, as well as social deviance?
What are the annual ordering and carrying costs : The average inventory is $250,000, and 5000 orders are placed in a year. What are the annual ordering and carrying costs?
What is the appropriate cost of capital for a project : The risk-free rate is 6%. The expected rate of return on the stock market is 10%. - What is the appropriate cost of capital for a project that has a beta of -2?-  Does this make economic sense?
What is the annual cost of carrying anticipation inventory : If inventory carrying costs are $3 per unit per quarter, what is the annual cost of carrying this anticipation inventory? Opening and ending inventories are zero.
What is the appropriate bond price today : What would it take for a bond to have a larger risk premium than default premium? - What is the appropriate bond price today?
What are reasonable guesstimates for the market risk premium : Explain the basic schools of thought when it comes to equity premium estimation. -  If you do not want to estimate the equity premium, what are your alternatives to finding a cost-of-capital estimate?
Explain benefits of induction to your organisation : Explain three purposes of induction and explain three benefits of induction to individuals - Explain 3 benefits of induction to your organisation
Describe the most beneficial training : Describe the most beneficial training you have ever received at one of your places of employment and why you feel this way. Provide a few examples.
Explain what factors are important to ongoing team dynamics : What aspects are essential in identifying appropriate members for teams and ensuring the teams are successfully launched? What factors are important to ongoing team dynamics? Describe guidelines to evaluate the function and productivity of teams.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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