What is the price of the treasury bond

Assignment Help Financial Management
Reference no: EM131044072

IM USING A TI-84PLUS CALCULATOR PLEASE SHOW ME HOW TO WORK IT USING THAT CALCULATOR IF POSSIBLE!

a BBB-rated Corporate bond has a yield to maturity of 5.0%. A U.S. Treasury security has a yield of 3.0%. These yields are quoted as APRs with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 3.2% and have five years to maturity.

A. What is the price (expressed as a percentage of the face value) of the treasury bond? ( round to three decimal places)

B. What is the price (expressed as a percentage of the face value) of the BBB-rated corporate bond? (Round to three decimal places)

C. What is the credit spread on the BBB bonds? (Round to two decimal places)

Reference no: EM131044072

Questions Cloud

What is expected total return and what is dividend yield : Consider Ford stock (F) with a current price of $20 per share and a standard deviation of returns of 15%. An investor expects to sell Ford stock in one year at $21 per share and expects the firm to pay a dividend of $1 per share at the end of the yea..
What is the securitys equilibrium rate of return : A particular security's default risk premium is 6 percent. For all securities, the inflation risk premium is 3 percent and the real interest rate is 2.5 percent. The security's liquidity risk premium is 1 percent and maturity risk premium is 2 percen..
What is expected total return and what is the dividend yield : Consider Ford stock (F) with a current price of $20 per share and a standard deviation of returns of 15%. An investor expects to sell Ford stock in one year at $21 per share and expects the firm to pay a dividend of $1 per share at the end of the yea..
Using the unbiased expectations theory : Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 3.0%, E(2R1) = 4.0%, E(3R1) = 12.0%, E(4R1) = 14.0%, Using the..
What is the price of the treasury bond : BBB-rated Corporate bond has a yield to maturity of 5.0%. A U.S. Treasury security has a yield of 3.0%. These yields are quoted as APRs with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 3.2% and have five years to maturity...
Describe a research study : Students will write a report (APA format) describing a research study they design in their area of study ( My area of study Medicine). This report will include the introduction, Participants/sampling method, procedures, data analysis (using one of th..
Suppose the riskiness of the stock decreases : California clinics, an investor-owned chain of ambulatory care clinics, just paid a dividend of $2 per share. The firm’s dividend is expected to grow at a constants rate of 5 percent per year, and investors require a 15 percent rate of return on the ..
What is the payoff for a call option with a strike price : What is the payoff for a call option with a strike price of $50 if the stock price at expiration is $40? What if the stock price is $65? What is the payoff for a put option with a strike price of $50 if the stock price at expiration is $40? What if t..
What is the bond''s yield to maturity and yield to call : General Electric has just issued a callable (at par) ten-year 8% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $104 and a face value of $104. What ..

Reviews

Write a Review

Financial Management Questions & Answers

  Stock to the systematic and firm-specific components

Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.0% + 0.4RM + eA RB = –1.8% + 0.9RM + eB σM = 15%; R-square A = 0.30; R-square B = 0.22 Break down the variance of each stock to the sy..

  What is total period cost for month under variable costing

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the total period cost for the month under variable costing?

  What are the tax status of the property to the corporation

Dedriea contributes to her wholly owned corporation some tangible personal property that she had used in her sole proprietorship business and depreciated. What are the tax status of the property to the corporation and the nature of the recognized gai..

  Accounts have the same quoted annual rate of interest

You are planning to deposit $1,000 in a savings account. Account A compounds semi annually while account B compounds monthly. If both accounts have the same quoted annual rate of interest,

  What is the horizon value

The Granite Paving Company is all-equity financed and has the following free cash flows in years 1-4: $3 million ($3M); $3.7M; $4M; $4.2M. After year 4, the firm is expected to grow at a sustainable rate of 3% per annum. With a WACC of 12%, what is t..

  Discount rate and the time increase the future value

Other things equal, as the discount rate and the time increase, the future value? remains constant, also increase, decrease, becomes negative, ow will vary but the direction of the change remains unknown

  What is the nature of the risk associated with risk-free

If the returns from a security were known with certainty, what shape would the probability distribution of returns graph have? What is the nature of the risk associated with "risk-free" U.S. government bonds?

  The firm does not undertake the new investment

California Real Estate, Inc., expects to earn $72.3 million per year in perpetuity if it does not undertake any new projects. The firm has an opportunity to invest $17.3 million today and $6.3 million in one year in real estate. What is the price of ..

  Price–weighted technology stock index

You want to form a price–weighted technology stock index using Apple, Google, and Intel. Apple’s adjusted closing price for 2015 is $112.75 and for 2014 is $100.78;Google’s adjusted closing price for 2015 is $647.82 and for 2014 is $582.36; Intel’s a..

  Calculate the weighted cost of capital

Corporations often use different costs of capital for different operating divisions. Using an example, calculate the weighted cost of capital (WACC). What are some potential issues in using varying techniques for cost of capital for different divisio..

  Interest on retirement savings

A couple will retire in 50 years; they plan to spend about $40,000 a year in retirement, which should last about 25 years. They believe that they can earn 7% interest on retirement savings.

  Expected to sell for immediately after it pays the dividend

OwenInc has a current stock price of $14.50 and is expected to pay a $0.85 dividend in one year. If OwenInc's equity cost of capital is 12%, what price would OwenInc's stock be expected to sell for immediately after it pays the dividend?

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