User Account

All Pages

What is the inflation premium

Assignment Help Financial Accounting
Reference no: EM132876166

Question - You are considering an investment in 30-year bonds issued by a corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 3.70 percent. Your broker has determined the following information about economic activity and the corporation bonds:

Determinants of Interest Rate for Individual Securities Real interest rate = 2.60%

Default risk premium = 1.95%

Liquidity risk premium = .80%

Maturity risk premium = 1.70%

Required - What is the inflation premium? What is the fair interest rate on the corporation's 30-year bonds?

Reference no: EM132876166

Questions Cloud

Discuss strengths and weaknesses of each theory : Senior leaders must understand how to motivate employees in a variety of ways. Discuss the strengths and weaknesses of each theory.
What is the cost per hour allocation rate : Based on the current outlook, Marbles Inc. likely will only use Ryan for 150 hours. What is the cost per hour allocation rate that Marbles would use
Job duties are unclear : Riyadh Pharma is a small medical practice owned by four doctors who are general practitioners. One of problems at Riyadh Pharma is that job duties are unclear.
Explain how social change legislation might support : Provide a description of which type of legislation might be the most effective in bringing about lasting social change and explain why
What is the inflation premium : Determinants of Interest Rate for Individual Securities Real interest rate = 2.60%. What is the inflation premium
Examine two types of risk responses using kerzner text : Examine two types of risk responses using the Kerzner text as a guide. Using your own experiences or conceptualizing a national project,
Explain the role of spirituality in twelve-step programs : Explain why those resources might be suitable for supporting Marge's recovery. Create a list of community resources in the community
Choose at least two risk implementation considerations : Choose at least two risk implementation considerations you need to decide (in advance) within a project. Provide a rationale for your response
Determine the corporation basis in the land : Tom transfers land worth $30,000 with a basis $21,000 in exchange for 100% stockworth $24,000 plus $6,000 cash. Determine the corporation basis in the land

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd