What is the liquidity premium on niendorf bonds

Assignment Help Finance Basics
Reference no: EM13300004

Niendorf Corporation's five-year bonds yield 6.75%, and five-year T-bonds yield 4.80%. The real risk-free rate is r* = 2.75%, the inflation premium for five-year bonds is IP = 1.65%, the default risk premium for Niendorf's bonds is DRP = 1.20% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t - 1) x 0.1%, where t = number of years to maturity. What is the liquidity premium (LP) on Niendorf's bonds?

Reference no: EM13300004

Questions Cloud

Determine the maximum acceleration of the eardrum : When responding to sound, the human eardrum vibrates about its equilibrium position. What is the maximum acceleration of the eardrum
Determine the load p if the total elongation of the system : A 0.25 in diameter copper rod BC is securely attached between two identical 1 in diameter steel rods (AB and CD). Find the load P if the total elongation of the system is measured to be 0.0312 in. Esteel= 29,000ksi, Ecopper=17,000ksi.
How many stars are in the galaxy : The sun moves in an orbit about the center of the Milky Way Galaxy at a speed of 290 km/s with a radius of 3 x 1020 km. How many stars are in the galaxy
Social fairness is a virtuous quality : Since social fairness is a virtuous quality (and one of the pillars of this country’s founding), explain why America did not embrace the revolutionary social theories purported by Marx and Engels.
What is the liquidity premium on niendorf bonds : The maturity risk premium for all bonds is found with the formula MRP = (t - 1) x 0.1%, where t = number of years to maturity. What is the liquidity premium (LP) on Niendorf's bonds?
Determine the flow regime sub or super- critical downstream : determine the rate of discharge through the gate; b) determine the critical depth , yc at the minimum energy, Es,min; c) determine the critical depth, yc at the current flow; d) determine the alternate depth; e) determine the flow regime (sub- or ..
What is the net force on the roof : During a violent storm, the wind over a flat, 200 m2 roof has a velocity of 10 m/s. What is the net force on the roof
What is the change in energy that the inductor is storing : if an inductor has a change of current 0.418 A to 0.948 and has an inductance of 1.324, what is the change in energy that the inductor is storing
How much would these bonds sell for today : Assume that WhirledCom has an issue of 15-year $1000 par value bonds that pay 6% interest, semi annually. Further assume that today's required rate of return on these bonds is 9%. How much would these bonds sell for today ?

Reviews

Write a Review

Finance Basics Questions & Answers

  Which of following investments have lowest present value

Which of the following investments would have the 'lowest' present value? Assume that the effective annual rate for all investments is the same and is greater than zero.

  Cpa or cfa designations

With the proliferation of corporate takeovers, leveraged buyouts, and restructuring in the United State, it would seem that CFO hold the keys to executive wisdom.

  What would be the incremental bad debt losses

The variable cost percentage is 60 percent and the cost of capital is 15 percent. What would be the incremental bad debt losses if the change were made?

  How social security pension can reduce consumption

Use indifference curve analysis to show how social security pension can reduce consumption for worker with perference for current vs. future consumption.

  Explain what is the firm optimal capital budget

Project A has average risk, B has below-average risk, C has above-average risk, and D has average risk. What is the firm's optimal capital budget when differential risk is considered?

  What is the value of def company

Both firms think they will have earnings of $55,000 a year continuously and because of their costs, neither firm pays any taxes. For the purposes of this problem, investors can also borrow money at 12% annually.

  What is the internal rate of return of this project

What is the internal rate of return of this project? 10.87% 11.57% 13.68% 15.13%

  Determining social efficient level of snowploughing services

Determine social efficient level of provision for snowploughing services. Write down 3 possible methods in which they can share costs of snow ploughing at social efficient level and how much would each person pay under these 3 methods?

  What is the break-even level of earnings before interest

What is the break-even level of earnings before interest and taxes between these two capital structure options?

  Create a presentation for management

Suppose the risk-adjusted cost of capital is 12 percent, compute net present value for each proposal. Include the cash flows from salvage value and the tax benefits of depreciation

  Which one of these is most apt to be a fixed cost

Which one of these is most apt to be a fixed cost? raw materials manufacturing wages management bonuses office salaries shipping and freight check my work.

  What is the current value of apis common stock

Given this scenario, what is the current value of API's common stock? If the current market price is $48.00 per share, should you purchase this stock.

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