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Here are the instructions. Answer all of the following questions - all apply to the Company XY 3.5% Notes due 2022 (Fixed Rate)

Issuer: Company XY

Principal Amount: $$2,500,000,000

Maturity: February 9, 2022

Coupon: 3.500%

Price to Public: 99.995% Interest Payment Dates: February 9 and August 9, commencing August 9, 2017

Day Count Convention: 30/360 Benchmark Treasury: 1.775% due January 31, 2022

Benchmark Treasury Yield: 1.921%

Spread to Benchmark Treasury: 58 basis points

Yield: 2.501%

1. If you purchased a $9,000 bond, how much interest do you receive on each bond payment?

2. How does the Company XY bond compare to a benchmark?

3. Are you guaranteed to receive interest payments until 2022? (ignore default risk)

4. How much does Company XY receive for issuing this bond?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92714597

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