Define what is the default risk premium on corporate bond

Assignment Help Finance Basics
Reference no: EM13304816

The yield on a certain 20 year corporate bond is 14%. the yield on 90 day treasury bills is 8% while 20 year treasury securities are yielding 12%. what is the default risk premium on the corporate bond? you must show all your work used to solve problem.

Reference no: EM13304816

Questions Cloud

Find expected error l if odolite has direct angular accuracy : Calculate expected error L if a theodolite has direct angular accuracy of 10" and a distance of 1500m was measured.
What was its average receivables balance : Dyl Pickle Inc. had credit sales of $3,600,000 last year and its days sales outstanding was DSO = 35 days. What was its average receivables balance, based on a 365-day year.
Determine what is the objects mass in kilograms : A force of 1.25x103N is required to lift an object that is under the influence of an acceleration due to gravity of 7.66ft/sec2. What is the object's mass in kilograms?
Find how much heat is transferred from the water to cool it : A bottle containing 3.4 kg (mass) of water at a temperature of 23.4 oC is placed in a refrigerator where the temperature is kept at 3.2 oC
Define what is the default risk premium on corporate bond : The yield on a certain 20 year corporate bond is 14%. the yield on 90 day treasury bills is 8% while 20 year treasury securities are yielding 12%. what is the default risk premium on the corporate bond? you must show all your work used to solve pr..
Determine the speed of the car at o at constant speed : A car traveling over a hill at constant speed starts to lose contact with the ground at O. If the radius of curvature of the hill is 85 m, determine the speed of the car at O.
How much kinetic energy is given to the particle : The isotope 15N undergoes radioactive decay to form 15C. What charged particle is emitted in the decay process? how much kinetic energy in MeV is given to the particle
What is unique about this project : Calculate the net present value of the strip mine if the cost of capital 5,10,15,30,71 and 80 percent.
Determine smallest velocity vo for which package will reach : A small package of weight W is projected into a vertical return loop at A with a velocity Vo. The package travels without friction along a circle of radius "r" and is deposited on a horizontal surface at C.

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Emerging issues task force-multiple exchange rates

Describe how the Emerging Issues Task Force influences Generally Accepted Accounting Standards. Describe the principal issue related to accounting for multiple exchange rates. Describe the conclusion that the EITF reached related to the issue and how..

  What coupon rate should the company set on its bonds

If a company would like to issue some semiannual coupon bonds at par. Comparable bonds have a current yield of 8.16 percent, an effective annual yield of 8.68 percent, and a yield to maturity of 8.50 percent. What coupon rate should the company se..

  Which of the following are the key resources for this step

The fourth step in the reengineering process is to understand the current process. Which of the following are the key resources for this step?

  Find new value of the portfolio

Suppose you are planning how to invest part of your retirement savings. You have decided to put $200,000 into three stocks: 50 percent of the money in GoldFinger.

  What target fa/sales raio should the company set

As part of that process, the company wants to set its target Fixed Assets/Sales raio at the level it would have had had it been operating at full capacity. What target FA/Sales raio should the company set?

  Recommend discontinuing transportation services

Two years have passed since the Phoenix STS program faced the loss of funding for its East Valley operations. During the two years, Phoenix STS has attempted to broaden the funding base of the entire program,

  Calculate present value if the discount rate is 12 percent

Calculate present value if the discount rate is 12%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

  Amortization for a patent

A corporation buy a patent for $900K with an estimated life of 15 years. It is subsequently reduced to ten years. During year 5, the product for which the patent is held is removed from market.

  What is the cost of common equity

MEC's tax rate is 40%. Two projects are available: Project A has a rate of return of 14%, while Project B's return is 9%. These two projects are equally risky and about as risky as the firm's existing assets.

  Calculating present value of an investment

Suppose you are planning the purchase of an investment that would pay you $5,000 per year for years 1-5, $3,000 per year for years 6-8, and $2,000 per year for years 9 and 10.

  Objective type questions on issue of dividend

Objective type questions on issue of dividend, which cost are a function of time and not sales and typically contractual

  Fund balances to governmental activities changes net assets

A governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures of $33,500,000, including capital outlay expenditures of $3,200,000.

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