What is default risk premium on the corporate bond

Assignment Help Financial Management
Reference no: EM131600054

Default Risk Premium A Treasury bond that matures in 10 years has a yield of 5.75%. A 10-year corporate bond has a yield of 8.5%. Assume that the liquidity premium on the corporate bond is 0.35%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.

Reference no: EM131600054

Questions Cloud

Describe the term procrastination : Describe the term "Procrastination" by using your procrastination experiences as examples - Explore or consolidate new learning.
Discuss the purpose of antitrust laws : The purpose of antitrust laws is to increase competition in an industry by preventing mergers and breaking up large firms.
What are the four pillars of corporate sustainability : What are the four pillars of corporate sustainability? Make recommendations to Uber on how to ensure that they maintain their sustainable competitive advantages
High-value exterior contractor : You are the Chief Information Officer (CIO) of GJPL Construction & Roofing, a high-value exterior contractor with 80 employees.
What is default risk premium on the corporate bond : A Treasury bond that matures in 10 years has a yield of 5.75%. What is the default risk premium on the corporate bond?
Discuss about the public ownership of natural monopolies : Public ownership of natural monopolies creates synergies between the newly acquired firm and other government-owned companies.
What is the stock current value per share : What is stock's current value per share?
What is the default risk premium on the corporate bond : What is the default risk premium on the corporate bond?
Explain how each data source is relevant to the problem : Discuss what data you have collected or researched to indicate there is a problem. Explain how each data source is relevant to the problem.

Reviews

Write a Review

Financial Management Questions & Answers

  Firm can hedge its interest rate risk on short-term fixed

How a firm can hedge its interest rate risk on a short-term fixed or variable rate bank loan or on a fixed

  Construct statements of cash flows

Construct Statements of Cash Flows for 20X2 and 20X3.Where is the company's money going to and coming from?Make a comment about their free cash flows during the period.Is it likely to have positive or negative free cash flows in the future?

  Interest expense be than under the relaxed policy

how much lower would its interest expense be than under the relaxed policy?

  Briefly describe the current international monetary system

Briefly describe the current international monetary system. What are the different types of exchange rate systems?

  Project has an initial cost and cost of capital

A project has an initial cost of $50,000, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital of 14%. What is the project's IRR?

  Municipal bond fund and taxable corporate bond fund

What are the main differences and similarities between managing a municipal bond fund and a taxable corporate bond fund?

  Determine the five equivalent values

A design-build-operate engineering company in Texas that owns a sizable amount of land plans to lease the drilling rights (oil and gas only) to a mining and exploration company. Utilize engineering economy relations by hand and by spreadsheet to dete..

  Bernie has set aside no retirement money

To date, Bernie has set aside no retirement money. If Bernie gets 8% compounded semiannually, how much must she invest today to meet her $900,000 goal?

  What is the expected interest rate for treasury bill

What is the expected interest rate for a U.S. Treasury bill?

  Discuss the operations of an insurance company

This week we discuss the operations of an insurance company. As stated before, the primary technique for risk management is transferring the risk, usually to an insurance company. Ask the risk manager of your company who provides the property insuran..

  Management expects this lack of growth to continue

Knight Supply Corp. has not grown for the past several years, and management expects this lack of growth to continue. The firm last paid a dividend of $4.25. If you require a rate of return of 15.5 percent, what is the current value of this stock to ..

  How much of the first payment will be interest

What will be the monthly payment? How much of the first payment will be interest, and how much will be principal?

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