Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The default-free yield curve on zero-coupon U.S. Government Treasury securities is given below.
Maturity (in years) Rate
1 .01
2 .015
3 .02
4 .025
5 .0275
6 .03
Currently you can buy a corporate bond sold by a company that has some chance of defaulting in the future. This corporate bond matures in 5 years, pays a 5 percent coupon once a year, and has a face value of $1000.
a.If there is no change of default what would be the price of this corporate bond? Hint: if there is no chance of default, then the required rates of return for money at various horizons is given by the Treasury zero yield curve above. Given these rates, what would be the price of the corporate bond?
b. If b. if there was a default-free bond with the same cash flows as the corporate bond described above, what would its price be? What would its yield to maturity be? Hint: Use goal seek to figure out the single rate YTM when applied to the cash flows implied a present value equal to the price you just derived.
c.The current price of the corporate bond with default risk is $1075 per $1000 in face value. What is the YTM on this bond? What is the annualized default risk premium on this bond (that is, what is the extra return per annum that this bond would return over a default free bond with the same payment stream)?
Determine the intrinsic value of the stock of company A,B, C using the following information: Dividends for the next four years are expected to be 0.59, 0.67, 0.76, 0.85.
Assuming a $4 dividend paid annually, what is the required return for preferred shareholders (i.e. component cost of preferred stock)? (assume floatation costs = $0.00)
Why do you think it is important for a reinsurance transaction to transfer risk in order for a company to obtain the benefits of reinsurance accounting? Discuss the accounting and legal issues behind such a requirement.
IF the bank holds $65 million in deposits and currently holds bank reserves such that excess reserves are zero, what required reserves ratio is implied?
Suppose you are working on a big project for the hospital's CFO. Together, you will create a system to justify the full time employees of laboratory department.
Calculate the expected EPS fo both financing plans - What factors should the company consider in deciding which financing plan to adopt?
Compute the bond's expected rate of return and determine the value of the bond to you, given your required rate of return
Compare the profits and accuracy of all cost allocation schemes based on Tom Arnold's initial reason for being hired and what is the purpose of a cost allocation system?
Familiarize yourself with one of the industry publications that reports physical, cash prices for natural gas. Inside FERC, Gas Daily and, OPIS do not allow their pubications to be copied unless you have a subscription and receive prior permission..
Explain the three steps involved in the calculation of cost of capital for Western Communications and calculate Western Communications' after-tax weighted average cost of capital.
Discuss the additional requirements that are placed on auditors from the Sarbanes-Oxley Act of 2002, and the actions of the Public Company Accounting Oversight Board (PCAOB).
A stock portfolio is similarly allocated among Stock A, B, & C. Stocks A, B, & C have betas of 1.9, 1, and 0.57, respectively. The market has just risen 4 percent.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd