What is the default risk premium on the corporate bond

Assignment Help Finance Basics
Reference no: EM13258357

A Treasury bond that matures in 10 years has a yield of 4%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.7%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.

Reference no: EM13258357

Questions Cloud

How many new retail outlets would be necessary to break : A final suggestion is a make a 10% across-the-board price reduction. By how much would dollar sales have to increase to maintain Alliance's current contribution.
List of various costs : Following is a list of various costs incurred in producing frozen pizzas. With respect to the production and sale of frozen pizzas, classify each cost as either variable, fixed, or mixed.
What is the technology solution for a company : Begin thinking of a business problem that could be solved with a technology solution for a company or organization you are familiar with. Use the Q&A Forum to ask questions and discuss your ideas about the project.
What is the cost basis for each asset : A business is purchased for 250,000. The fair market value of assets are equipment 90,000, building 135,000, and goodwill 15,000. What is the cost basis for each asset?
What is the default risk premium on the corporate bond : A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.7%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
What is the default risk premium on the corporate bond : A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.7%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
What will the portfolios new beta : using the proceeds to purchase another stock with a beta of 1.35. What will the portfolio's new beta be after these transactions? Round your answer to two decimal places.
What is the cost basis for each asset : A business is purchased for 250,000. The fair market value of assets are equipment 90,000, building 135,000, and goodwill 15,000. What is the cost basis for each asset?
Determine the phase shift in each case at 50 and 75hz : a second instrument is required to measure the input signals up to 100Mz with an amplitude inaccuracy of less than 1% calculate the natural frequency requirements, if the damping retios are 0.3 and 0.6 respectively.

Reviews

Write a Review

Finance Basics Questions & Answers

  Find the value of one right

Gold Mining Company is seeking to increase $10,000,000 through a rights offering. The firm presently has 1,000,000 shares of common stock outstanding at a current market price of $25 per share.

  Determinig annual installments

What if you make the first payment on loan immediately instead of at the end of first year?

  Determine effective annual rate of interest

The corporation you work for will deposit $600 at the end of each month in your retirement fund. Interest is compounded monthly. You plan to retire fifteen years from now and estimate that you will need $2000 each month out of the account for the nex..

  Anchoring bias and herding behavior

Determine two (2) critical ways in which anchoring bias and herding behavior contribute to market bubbles.

  Computing the current price of the stock

CPX Corporation just paid a dividend of $1 each share. Analysts expect the company's dividend to increase 10 percent this year and 8 percent the next year.

  Prepare journal entry to record sales

Steve Smith, owner of Steve's Bowling Alley, generated $30,000 in sales for the month of January. "Regular" customers are allowed to play on account.

  Determine the better investment

Use the present value of an annuity formula Determine  which is the better investment.

  Find the value of an individual bond

Calculation of issue value of bond considering time value of money - Find the value of an individual bond from this issue to an investor who purchases the Wilson bond on the date of issue (November 15, 2004) assuming they require an 8% return?

  Determining present value

You decided to play the lottery & you were the only winner of a jackpot amount at $50,000,000. You contact the lottery and they make you the following offer:

  Prepare journal entry to record impairment of the asset

Given below is information related to copyrights owned by Yaeger Company at December 31, 2004:

  Calculate the expected rate of return on investments

Douglas Keel, a financial analyst for Orange Industries, wishes to determine the rate of return for two similar-risk investments, X and Y. Douglas's research indicates that immediate last returns will serve as reasonable estimates of future returns.

  Recommendations for a cash management plan

Marcia and Phil Helm, a couple in their thirties, have been married for many years. They have no children, and each has a professional career. Marcia is a trainee for a management position at a big department store, and Phil is an engineer at an elec..

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