You are considering an investment in a aaa-rated us

Reference no: EM13394475

You are considering an investment in a AAA-rated U.S. corporate bond but you are not sure what rate of interest it should pay. Assume that the real risk-free rate of interest is 1.0%; inflation is expected to be 1.5%; the maturity risk premium is 2.5%; and, the default risk premium for AAA rated corporate bond is 3.5%. What rate of interest should the U.S. corporate pay?

Reference no: EM13394475

Questions Cloud

Project managers whenever engaging stakeholders use : project managers when engaging stakeholders use techniques mentioned in this module. are some of these techniques

Income statements are presented in the table below for the : income statements are presented in the table below for the elf corporation for the years ending december 31 2010 2009

Explain practices that must be followed in directing and : 1 what is quality assurance and how does it affect project execution? what are the tools and techniques used in

Researchers are most likely to use open-ended items under : 1 what are the two main characteristics of survey research?a large random samples and self-report measuresb self-report

You are considering an investment in a aaa-rated us : you are considering an investment in a aaa-rated u.s. corporate bond but you are not sure what rate of interest it

Should higher education be classified as natural monopoly : most european countries have nationalized their universities and colleges. consider that some countries have also used

Effects of september 11 within a few days after the : effects of september 11 within a few days after the september 11 2001 terrorist attact on the united states the federal

Determine the amount of dividends paid each year to each of : yorks outstanding stock consists of 57000 shares of cumulative 9.00 preferred stock with a 10 par value and also 142500

Your company is bidding on a project for the entertainment : many of the technical staff on the project come in between 930 and 1000 am while the business users always come in

Reviews

Write a Review

Required(*) Message

Finance Basics Questions & Answers

Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

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!

Submit Assignment

User Account

All Pages