What is the yield to maturity of the d&l bond

Assignment Help Finance Basics

Reference no: EM13269640

The 7 percent annual coupon bonds of D&L Movers have a market price of $877.99, a face value of $1000, and 15 years until the maturity whild equivalent government debt trades at 5% yield.

a. What is the yield to maturity of the D&L bond.
b.What would the price of D&L movers' bond be a year from now if credit spread widens by 2% points while the comparable government yield increase by 1%
c. What would the IRR of an investment in the bond be if D&L movers' fails to make the last 2 coupon payments and the bankruptcy court reduces the face value to $400,yet it arrives on time?
d.What would the IRR of an investment in the bond be if D&L movers' default two years from now and you manage to sell the defaulted bond 6 month later for 30% of the face value while the restructuring was underway?

Reference no: EM13269640

Questions Cloud

Describe three components found in a web system : In order to design Web forms in Visual Studio.NET

How much will you pay for the company stock today : If you require a return of 9 percent on your investment, how much will you pay for the company's stock today?

Determine the height of the final image : A diverging lens (f = -10 cm) is located 20.0 cm to the left of a converging lens (f = 31.5 cm). A 3.00 cm tall object stands to the left of the diverging lens, What is the height of the final image

How high will it bounce after it strikes ground for nth time : A ball is dropped from a height of 10 feet. Each time it strikes the ground, it bounces up to 80% of the previous height a.What height will the ball bounce to after it strikes the ground for the third time b.How high will it bounce after it strikes ..

What is the yield to maturity of the d&l bond : The 7 percent annual coupon bonds of D&L Movers have a market price of $877.99, a face value of $1000, and 15 years until the maturity whild equivalent government debt trades at 5% yield.

What is your average holding period return per year : Suppose that exactly 2 years ago you bought a a12% annual coupon bond for $1000. The bond had 13 years to maturity. Today the yield-to-maturity declined to 11% and you decide to sell. What is your average holding period return per year?

Identify a current issue in workplace : Identify a current issue in your workplace you believe requires change. Identify and discuss the leadership attributes and skills you will draw upon to effect change.

What is the closest number to the required rate of return : If the dividend growth rate is expected to remain constant at the current level, what is the closest number to the required rate of return on this stock?

What is the market price of this shock : A conpamy planning on paying $1.5 and $1.75 and $1.8 a share over the next 3 years, respectively. After that, the dividend will be constant at $1.5 per share per year. What is the market price of this shock if the market rate of return is 10.5 per..

User Account

All Pages