Is the disney bond necessarily a bad investment

Assignment Help Financial Management
Reference no: EM131235183

1. A bond will pay off $100 with probability 99% and will pay off nothing with probability 1%. The equivalent risk-free rate of return is 5%. What is an appropriate promised yield on this bond?

2. An L.A. Lakers bond promises an investment rate of return of 9%. Time-equivalent Treasuries offer 6%. Is this necessarily a good investment? Explain.

3. A Disney bond promises an investment rate of return of 7%. Time-equivalent Treasuries offer 7%. Is the Disney bond necessarily a bad investment? Explain.

Reference no: EM131235183

Questions Cloud

Analyze what is meant by religion : Analyze what is meant by religion. Analyze the similarities and differences in the primary beliefs held by major religious traditions and the cultures in which these religions evolved.
Analyze what is meant by religion : Analyze what is meant by religion. Analyze the similarities and differences in the primary beliefs held by major religious traditions and the cultures in which these religions evolved.
Discuss the role that emotional intelligence plays : Discuss the role that emotional intelligence (EI) plays in the self-leadership. Be sure to provide an analysis of all four dimensions of EI (self-awareness, self-management, social awareness, and relationship management) in your response
Analyze the equilibrium price and quantity in the market : Describe the equilibrium price and quantity in this market. Assume that the government imposes a price floor of $12 in the E-Book market. Explain what would happen in this market.
Is the disney bond necessarily a bad investment : What is an appropriate promised yield on this bond? - Is the Disney bond necessarily a bad investment? Explain.
What is the calculated twa : What is the calculated TWA? What would you tell plant management in terms of exposure to acetone and compliance with the PEL
How much starting torque will the motor develop : A squirrel cage motor produces 1100 pound feet of torque at starting when full voltage is applied to the motor. If the voltage is reduced to 50% during starting, how much starting torque will the motor develop?
The capped containers are pasteurized-after pasteurization : ABC manufactures Jam. The process is quite simple, they add all of the ingredients to a big vat for cooking. The jam is vacuum cooked where it is then placed in a holding tank. Next, the jam is put in a smaller containers and capped. The capped conta..
What is current yield to maturity of taxable vanguard bond : What is the current yield-to-maturity of a taxable Vanguard bond fund invested in Treasury bonds? - What is the current yield-to-maturity of a taxable Vanguard bond fund invested in investment-grade bonds?

Reviews

Write a Review

Financial Management Questions & Answers

  Evaluating an extra dividend versus share repurchase

Flashback Corporation is evaluating an extra dividend versus a share repurchase. In either case, $21,060 would be spent. Current earnings are $3.60 per share, and the stock currently sells for $90 per share. What will Flashback’s EPS and PE ratio be ..

  Currently the stock is selling

Currently the stock is selling for $38.25. A call to buy the stock at $40 is selling for $3.38 and a put to sell the stock at $35 is selling for 1.94. How could you use a collar to reduce your risk of loss from a decline in the price of the stock?

  The lump-sum amount instead of the annuity

Katy won the Texas lottery. She can take a single lump-sum payout of $12.5 million dollars or receive $825,000 per year for the next 25 years. What rate of return would Katy need to break even if she took the lump-sum amount instead of the annuity?

  Asset whose value is based on expected future cash flows

The value of an asset whose value is based on expected future cash flows is determined by the present value of all future cash flows the assets will generate. Given the case scenario and target audience provided, select and discuss a simple asset sit..

  How much of this judgment would the insurance cover

Becky Fenton has 70/140/80 automobile insurance coverage. If two other people are awarded $115,000 each for injuries in an auto accident in which Becky was judged at fault, how much of this judgment would the insurance cover?

  What rate can you earn on a one-year risk-free us security

The spot rate for the Japanese yen currently is ¥121 per $1. The one-year forward rate is ¥120 per $1. A risk-free asset in Japan is currently earning 5 percent. If interest rate parity holds, what rate can you earn on a one-year risk-free U.S. secur..

  Explain the agency problem of mncs

a. Explain the agency problem of MNCs. b. Why might agency costs be larger for an MNC than for a purely domestic firm?

  Adjusting entry for supplies

The balance in the supplies account, before adjustment at the end of the year, is $5,330. Journalize the adjusting eatry require if the amount of supplies on hand at the end of the year is $1,825.

  Equipment is depreciated straight-line to a zero book value

Thornley Machines is considering a 3-year project with an initial cost of $1,080,000. The project will not directly produce any sales but will reduce operating costs by $640,000 a year. The equipment is depreciated straight-line to a zero book value ..

  List the three primary sources of revenue

List the three primary sources of revenue from a commercial customer's account. In today's economic environment, indicate whether each is growing or declining in use and explain why.

  What was your dollar return on this investment

You purchased 270 shares of a particular stock at the beginning of the year at a price of $75.33. The stock paid a dividend of $.95 per share, and the stock price at the end of the year was $81.84. What was your dollar return on this investment?

  What is the probability that a randomly selected family

What is the probability that a randomly selected family of four spends less than $480 per month? (Round your answer to 4 decimal places.)

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