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A BBB-rated corporate bond has a yield to maturity of 10.2%. A U.S. treasury security has a yield to maturity of 8.4%. These yields are quoted as APRs with semiannual compounding. Both bonds pay semi-annual coupons at a rate of 9.4% and have five years to maturity.
a. What is the price (expressed as a percentage of the face value) of the treasury bond?
b. What is the price (expressed as a percentage of the face value) of the BBB-rated corporate bond?
c. What is the credit spread on the BBB bonds?
a. What is the price (expressed as a percentage of the face value) of the treasury bond? The price of the treasury bond as a percentage of face value is %. (Round to three decimal places.)
Nungesser Corporation's outstanding bonds have a $1,000 par value, a 11% semi-annual coupon, 7 years to maturity, and an 10.5% YTM. What is the bond's price? Round your answer to the nearest cent
Associated Breweries is planning to market unleaded beer. To finance the venture, it proposes to make a rights issue with a subscription price of $10. One new share can be purchased for every two shares held. The company currently has outstanding 140..
The option expires on March 20, 2007. Estimate the price of a March 126 put.- What is the volatility implied by the price you estimate for this option?
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Winners Games reported sales of $72,000 and net income totaling $12,000 during the year. It’s selling price is $6 per unit, its variable cost is $2 per unit, and its total fixed costs are $36,000. How much is the projected margin of safety? What is a..
Assume today is December 31, 2013. Imagine Works Inc. just paid a dividend of $1.10 per share at the end of 2013. The dividend is expected to grow at 18% per year for 3 years, after which time it is expected to grow at a constant rate of 5% annually...
The Caughlin Company has a long-term debt ratio of .43 and a current ratio of 1.50. Current liabilities are $990, sales are $6,410, profit margin is 9.3 percent, and ROE is 20.4 percent. What is the amount of the firm’s net fixed assets?
What is the present worth of a series of equal end-of-month payments of $1,500 if the series extends over a period of eight years at 9% interest compounded quarterly? (Show work)
What is the delta of a short position in 4,000 European call options on gold futures? The options mature in eight months, and the futures contract underlying the option matures in nine months. The current nine-month futures price is $10 per ounce, th..
What might be the economic costs of these impacts?
Calculate the present value of the following annuity streams: $7,000 received each year for 5 years on the last day of each year if your investments pay 6 percent compounded annually.
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