What does the article mean by comparable treasury

Assignment Help Financial Management

Reference no: EM13932719

In 2012, Anheuser-Busch In Bev NY, maker of Budweiser and other beer, sold debt of varying maturities. According to an article in the Wall Street Journal: "The three-year notes priced with a risk premium of 0.5 percentage point over comparable Treasury; the five-year notes at a spread of 0.8 percentage point to Treasury, the 10-year notes at 1.05 percentage points over Treasury".

1) What does the article mean by "comparable" Treasury?

2) What does the article mean by a "risk premium"?

3) Why does the risk premium increase the longer the maturity off Anheuser-Busch's debt?

Reference no: EM13932719

Questions Cloud

Compute realized rate of return for investor purchased bonds : Six years ago the Singleton Company issued 16-year bonds with a 14% annual coupon rate at their $1,000 par value. The bonds had a 9% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of return ..

Compute the cost of goods sold and ending inventory : Use a vertical model to show the 2013 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average.

What is the projects terminal cash flow : PDF Corp. needs to replace an old lathe with a new, more efficient model. The old lathe was purchased for $50,000 nine years ago and has a current book value of $5,000. The new lathe is expected to be sold for $5,000 at the end of the project's ten-y..

Understanding management accounting practices : For this assignment you will need to read the following article: Scapens, R.W. (2006) 'Understanding management accounting practices: a personal journey',

What does the article mean by comparable treasury : In 2012, Anheuser-Busch In Bev NY, maker of Budweiser and other beer, sold debt of varying maturities. According to an article in the Wall Street Journal: "The three-year notes priced with a risk premium of 0.5 percentage point over comparable Treasu..

Role of innovation for sustainable development : Discuss the role of innovation for sustainable development and global management practices at RipCurl. In your answer discuss how managers a tRip Curl can make a difference in the newwork place and how Human Resource Management can drive RipCurl's..

Techniques of the module to the analysis of real-world : The purpose of the Final Project is to apply the concepts and techniques of the module to the analysis of real-world situations or problems. Students are expected to use diverse sources of information and to carry out an original analysis rather t..

Purchased a zero-coupon bond one year : You purchased a zero-coupon bond one year ago for $277.33. The market interest rate is now 8 percent. Required: If the bond had 17 years to maturity when you originally purchased it, what was your total return for the past year?

Why bonds be poor investment in period of high inflation : In 2012, an article in the Economist magazine recommended to investors that if economic growth and inflation are low in the United States, investors should buy bonds. But if inflation accelerated rapidly, investors "should buy commodities, especially..

User Account

All Pages