What is the risk-free rate if corporate bond

Assignment Help Financial Management
Reference no: EM131975805

What is the risk-free rate if a corporate bond yielding 7.1% has a Default Risk Premium of 2.5%, a Maturity Risk Premium of 2.9% and a Liquidity Premium of 0.4%? Put your answer as a number with 2 decimals and no % symbol - i.e. 5.95% should be entered as 5.95, not .0595.

Reference no: EM131975805

Questions Cloud

What part of its value is due to growth opportunities : If Trend-Line’s earnings per share will be $9 next year, what part of its value is due to growth opportunities?
Find the price and P-E ratio of the firm if plowback ratio : Find the price and P/E ratio of the firm. Find the price and P/E ratio of the firm if the plowback ratio is reduced to 0.40.
A bond for ibm maturing : A bond for IBM maturing in 14 years and 3 months has quarterly coupon payments of $11.50.
Shares of voting stock outstanding : T Co. has 100 shares of voting stock outstanding. T Co. has operating asset worth $900 and nonoperating assets worth $300. T Co. also has debts totaling $200.
What is the risk-free rate if corporate bond : What is the risk-free rate if a corporate bond yielding 7.1% has a Default Risk Premium of 2.5%, a Maturity Risk Premium of 2.9%
What is the sum of the net working capital : What is the sum of the net working capital AND the market value of fixed assets.
What is the equivalent annual cost of the battery : The tax rate is 30% and cost of capital is 12%. What is the (after taxes) equivalent annual cost of the battery?
Mutual fund can achieve an annual return : Suppose you are committed to owning a $235,000 Ferrari. If you believe your mutual fund can achieve an annual return of 11 percent,
What is the yield to maturity for bond : What is the yield to maturity for a bond that pays $45 coupon payments once per year and matures in 10 years and is currently priced at 872.24?

Reviews

Write a Review

Financial Management Questions & Answers

  Pete and petunia about estate planning

What types of financial planning tools should they use in their decision making process? What advice would you give Pete and Petunia about Estate Planning?

  What is snoopy total outlay

Snoopy borrows 6500 dollars to pay for his new super-deluxe doghouse. what is Snoopy's total outlay?

  Dividend discount model and market to book value models

Would the dividend discount model and the market to book value models be good ways to determine the intrinsic value of Jet Blue’s stock?

  Before-tax component cost of debt

Oberon, Inc., has a $15 million (face value) 8-year bond issue selling for 95 percent of par that pays an annual coupon of 7.95 percent. What would be Oberon’s before-tax component cost of debt?

  Initial outlay of cash against the present value of return

Having trouble understanding about Net Present Value. One of the reasons is that, It provides a concrete number that managers can use to easily compare an initial outlay of cash against the present value of the return. What does it mean?

  Adverse effect on a cash concentration system

Comment on the major issues involved in the structuring and implementation of an efficient cash collection system. Comment on some of the problems that can have an adverse effect on a cash concentration system.

  What is the current share price

The required return is 12% and the company just paid a $2.00 annual dividend. What is the current share price?

  Accounting standards allow for flexibility in interpretation

After computing the current period’s basic and diluted EPS figures, Do the accounting standards allow for this flexibility in interpretation?

  Repayment into income statement and cash flow statement

Calculate the effects of borrowing and include the debt interest paid and the principal repayment into the income statement and cash flow statement.

  Cash receipts-cash disbursements when preparing cash budgets

[Short-Term Financial Planning] The Itsar Products Company has made the following monthly estimates of cash receipts and cash disbursements when preparing cash budgets for the next twelve months. Determine whether the cash need (if any) can be repaid..

  Two stocks to be correctly priced relative to each other

Stock Y has a beta of 1.45 and an expected return of 15.1 percent. Stock Z has a beta of 0.9 and an expected return of 11.8 percent. Required: What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

  How much of the third loan payment is interest

How much of the third loan payment is interest?

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