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1. Assume the conditional default probability for a given bond is 6% in year 1 and 15% in year 2. What is the equilibrium spread for a 2-year CDS covering this bond? Assume a 4% discount rate, $1 notional principal, and a 35% recovery rate given default. Record your answer in percentage form, with at least two decimal places

2. Complete a valuation of Heinz for this acquisition based on the actual financial information given. Briefly explain why you selected certain companies to include in your transaction analyses as comparable firms.

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Financial Management, Finance

Category:- Financial Management
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