What is delta bond risk premium

Assignment Help Finance Basics
Reference no: EM132187920

Delta has both equity and debt used to finance itself. Delta's beta is 1.5. Average return on market is 13% and the risk free rate is 1%. Delta has a 30 year fixed coupon bond with 10 years left until maturity with a 6% coupon rate paid annually. This bond is currently trading at 964.06. What is Delta's bond's risk premium?

Reference no: EM132187920

Questions Cloud

Dividend every year : Suppose a stock is trading at $80 per share and that it pays a dividend every year, forever. The company will pay a $2 dividend one year from today.
Capital budgeting process : 1. What is the difference between scenario analysis and sensitivity analysis? How might you use each during the capital budgeting process?
What is the risk premium for bond : 5% coupon rate paid annually. trading at price of 937.90. the risk free rate is currently 1.5% what is the risk premium for this bond?
What is the current risk free rate : Apple Inc has a beta equal to 1.8. Average return for market portfolio has been 14%. If the required rate of return for Apple inc is 23.6%
What is delta bond risk premium : This bond is currently trading at 964.06. What is Delta's bond's risk premium?
What is the expected rate of return of the stock : A stock has a beta of 1.20, the expected market rate of return is 12%, and a risk-free rate of 5 percent. What is the expected rate of return of the stock?
What is the total amount the webster student : A Webster University student recently graduated from a Masters Program, obtained a good job and is buying a car. What is the total amount the Webster Student ca
What is the yield-to-maturity : A $10,000 face value STRIPS is currently quoted at 38:16 and has 13 years to maturity. What is the yield-to-maturity?
Why is the npv of a relatively long-term project : Why is the NPV of a relatively long-term project (one for which a high percentage of its cash flows occurs in the distant future

Reviews

Write a Review

Finance Basics Questions & Answers

  What is your yield to? maturity

Abner? Corporation's bonds mature in 25 years and pay 7 percent interest annually. If you purchase the bonds for ?$725, what is your yield to? maturity?

  Compare and contrast process of accounting standard setting

Compare and contrast the process of accounting standard setting and financial statement presentation between these regulatory agencies.

  Describe the economic and industry environment

BAFN600 - Describe the economic and industry environment for the industry in general and the selected company in particular. Critically evaluate

  Due to its asset size tiaa-cref owns many shares in a

investors generally can make one vote for each share of stock they hold. tiaa-cref is the largest institutional

  What is the settlement amount on the fra

What is the settlement amount on the FRA (recall that FRAs are settled in present-value)? Assume the Actual/360 convention.

  What is the yield on given days risk-free securities

Assume that interest rate parity holds. In both the spot market and the 90-day forward market, 1 Japanese yen = 0.0086 dollar.

  Distinguish between one-tailed and two-tailed t-tests

Distinguish between one-tailed and two-tailed t-tests.

  Describe the theoretical problems of ethic

Describe the theoretical problems of ethics (3), the objectives to solving them.

  Compute the total principal payments and total interest

With a $400k home mortgage loan with a 15 year term at 9% APR compounded monthly, compute the total principal payments and total interest (undiscounted) paid over the first 5 years of ownership.

  What is your dependent variable

Give an example of a situation related to your current job (or the job you would like to have after graduation) in which you would use a one-way ANOVA.  What is your independent variable? What are the levels of that variable? What is your dependent v..

  The real risk-free rate is 4 inflation is expected to be 1

the real risk-free rate is 4. inflation is expected to be 1 this year and 5 during the next 2 years. assume that the

  Substantive issues you must deal

What are you finding to be the most substantive issues you must deal with to maximize buy-in from your Board?

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