What is the default risk premium on corporate bond

Assignment Help Financial Management
Reference no: EM132031697

A Treasury bond that matures in 10 years has a yield of 4%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.3%. What is the default risk premium on the corporate bond? Round your answer to two decimal places. %

Reference no: EM132031697

Questions Cloud

Shareholders in exchange for their shares : In a perfect capital market, how many shares must Bob offer CompanyC's shareholders in exchange for their shares?
What is american actual true cost of hedging : what is American's actual true cost of hedging if the spot rate at the end of 90-days is $1.73/£?
Cost of capital for layton motors : You have recently been hired by Layton Motors, Inc. (LMI), in its relatively new treasury management department.
What is the price of bonds and yield to maturity : Renfro Rentals has issued bonds that have a 8% coupon rate, payable semiannually. What is the price of the bonds? What is their yield to maturity?
What is the default risk premium on corporate bond : Assume that the liquidity premium on the corporate bond is 0.3%. What is the default risk premium on the corporate bond?
What is the price of bond : Spruce Corp. has a bond outstanding that has a $1,000 par value, semiannual coupon rate of 3% and a current yield of 5.5%. What is the price of the bond?
What is value of the bond : Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. what is the value of the bond?
For what range of prices of the underlying asset does : A trader sells a strangle by selling a call option with a strike price of $50 for $3 and selling a put option with a strike price of $40 for $4.
What is the optimal number of futures contracts with tailing : What is the optimal number of futures contracts with tailing the hedge? Assume the same hedge ratio.

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