Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Basic Finance Expert

At present, 20-year Treasury bonds are yielding 5.1%, while some 20-year corporate bonds that you are interested in are yielding 9.1%. Assuming that the maturity-risk premium on both bonds is the same and that the liquidity-risk premium on the corporate bonds is 0.25% while it is 0.0% on the Treasury bonds, what is the default-risk premium on the corporate bonds?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M92251236
  • Price:- $10

Priced at Now at $10, Verified Solution

Have any Question?


Related Questions in Basic Finance

Hope bonds have a coupon rate of 7 and mature in 7 years

Hope bonds have a coupon rate of 7% and mature in 7 years. Assuming semi-annual coupons with face value of $100, what is the value of this bond? Similar bonds yield 6%.

You were offered to purchase a stock that paid a 200

You were offered to purchase a stock that paid a $2.00 dividend yesterday. You expect the dividend to grow at a rate of 5% per year into a perpetuity. If the appropriate rate of return for the stock is 11%, what is the m ...

A project costs 67600 and is expected to generate 16000 per

A project costs $67,600 and is expected to generate $16,000 per year for 6 years. The firm's required rate of return is 8%. What is the traditional payback period and discounted payback period?

Moore company is about to issue a bond with semiannual

Moore Company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and a par value of $1,000. The yield to maturity for this bond is 10%. a. What is the bond price if it matures in five, ten, fi ...

Use the following datadown payment to finance vehicle 4000

Use the following data: Down payment (to finance vehicle) $4,000 Down payment for lease$1,200  Monthly loan payment $560 Monthly lease payment $440  Length of loan 48 months Length of lease payment 48 months Value of veh ...

Small fry inc has just invented a potato chip that looks

Small Fry, Inc., has just invented a potato chip that looks and tastes like a french fry. Given the phenomenal market response to this product, Small Fry is reinvesting all of its earnings to expand its operations. Earni ...

What is a budget variance analysis and why is this type of

What is a budget variance analysis and Why is this type of analysis key to determining the strengths and weaknesses of a business?

Kings department store is contemplating the purchase of a

King's Department Store is contemplating the purchase of a new machine at a cost of $36,686. The machine will provide $4,900 per year in cash flow for fourteen years. King's has a cost of capital of 12 percent. calculate ...

Question - bridgestone a japanese-based company receives

Question - Bridgestone, a Japanese-based company, receives recurring income in USD of about USD 5 billion per year. The current exchange rate is ¥120/USD. The annualized exchange rate volatility is 10%. The interest rate ...

1 an analyst has modeled xyz stock using the fama amp

1.) An analyst has modeled XYZ stock using the Fama & French three factor model (FF3FM). Over the past few years the risk premium on SMB was 2.75% and the risk premium on HML was 3.50%. Regression analysis shows that XYZ ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As