Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
To value an option-free bond, we must determine the on-the-run yield curve for the particular issuer whose bond we have to value. This on-the-run yield curve used for valuation process is considered as the benchmark interest rates.
Let us consider the following on-the-run issue. The illustration deals with an option-free bond with four years remaining to maturity and a coupon rate of 6.5%.
Maturity
Yield to Maturity (%)
Market Price (in $)
1 year
3.4
100
2 years
3.9
3 years
4.7
4 years
5.0
Each bond is trading at par value i.e., at $100, so the coupon rate is equal to the yield to maturity.
Using the bootstrapping method, the spot rates are determined as follows:
Years
Spot Rates (%)
1
3.3000
2
3.9098
3
4.8120
4
5.0586
Using spot rates, we can calculate the present value of the cash flows.
= $105.374
Explain the Baumol Model
Complete the financial reporting for each period and develop recommendations using the templates provided. Procedure 1. Read the case study. 2. Complete the financial reports
Brixton Products is considering the purchase of a new $520,000 computer-based entry order system. The cost of the system will be depreciated on a straight-line basis over its five
Accounts receivable are sometimes not collected.Why do companies extend trade credit when they could insist on cash for all sales? Extending trade credit almost for all the tim
Question based on Share Holder Value Maximizations ? Hatsun Agro Product limited (HAPL) over the last Five years has shown a steady growth in its sales revenue and profits. The
Working of SEC The SEC supervises the main members in the securities world, including securities brokers and dealers, securities exchanges, investment advisors, and mutual fund
Discuss the option of dividend reinvestment plans
Modern / Discounting Cash Flow Techniques : These methods generally are of more use to businesses in their investment decisions. They take into account the time value of money and
The call prices for various issues mentioned above are known as regular redemption prices. Point to be noted is that the regular redemption prices are above
Q. What do you mean by Business Risk? Business risk is that portion of the unsystematic risk caused by the operating environment of the business. Business risk arises from the
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd