If 10-year T-bonds have a yield of 4.6%, 10-year corporate bonds yield 6.9%, the maturity risk...

If 10-year T-bonds have a yield of 4.6%, 10-year corporate bonds yield 6.9%, the maturity risk premium on all 10-year bonds is 1.3%, and corporate bonds have a 0.15% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond? (Express your answer as a percent and round your answer to two decimal places.)

5-year Treasury bonds yield 6.7%. The inflation premium (IP) is 2.13%, and the maturity risk premium (MRP) on 5-year T-bonds is 0.52%. There is no liquidity premium on these bonds. What is the real risk-free rate, r*? (Express your answer as a percent and round your answer to two decimal places)

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jeff jeffy answered 2 years ago

Suppose 10-year T-bonds have a yield of 5.30% and 10-year corporate bonds yield 6.65%. Also, corporate...

Suppose 10-year T-bonds have a yield of 5.30% and 10-year corporate bonds yield 6.65%. Also, corporate bonds have a 0.25% liquidity premium versus a zero liquidity premium for T-bonds, and the maturity risk premium on both Treasury and corporate 10-year bonds is 1.15%. What is the default risk premium on corporate bonds? Group of answer choices 1.22% 1.34% 1.10% 0.86% 1.20%

If 10-year T-bonds have a yield of 6 %, and the 10-year corporate bonds of Raytheonion...

If 10-year T-bonds have a yield of 6 %, and the 10-year corporate bonds of Raytheonion Inc. yield 9 %, the maturity risk premium on all 10-year bonds is 1.52%, and corporate bonds have a 0.48 % liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond?

YIELD TO MATURITY A firm's bonds have a maturity of 10 years with a $1,000 face...

YIELD TO MATURITY A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,052, and currently sell at a price of $1,099.77. What is their nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is their nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. %

YIELD TO MATURITY-4 A firm's bonds have a maturity of 10 years with a $1,000 face...

YIELD TO MATURITY-4 A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,048, and currently sell at a price of $1,092.12. What is their nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. %? What is their nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. %? What return should...

A 10-year zero coupon bonds was issued with a yield to maturity of 5% You are...

A 10-year zero coupon bonds was issued with a yield to maturity of 5% You are an investor with a one-year holding period with an ordinary income tax of 40% and capital gain tax of 20%. Assume in one year the interest rate remains the same. Determine: The current price of the bond The price of the bond at the end of the year The after tax holding period return

The yield to maturity on 1-year zero-coupon bonds is currently 6.5%; the yield to maturity on...

The yield to maturity on 1-year zero-coupon bonds is currently 6.5%; the yield to maturity on 2-year zeros is 7.5%. The Treasury plans to issue a 2-year maturity coupon bond, paying coupons once per year with a coupon of 8.5%. The face value of the bond is $1,000. At what price will the bond sell? What will the yield to maturity on the bond be? If the expectations theory of the yield curve is correct, what is the market expectation...

Jamal owns two 10-year bonds that both have a yield to maturity of 4% that pay interest annually.

Jamal owns two 10-year bonds that both have a yield to maturity of 4% that pay interest annually. One bond has a 4% coupon and trades at 100% (par). The other bond has a 2% coupon and trades at 83.78%. What is the current yield of the 4% bond? What is the current yield of the 2% bond? If yields in general were to drop by 1% from 4% to 3%, how much would each bond change in price? Which,...

A sample containing years to maturity and yield for 40 corporate bonds is contained in the...

A sample containing years to maturity and yield for 40 corporate bonds is contained in the Excel Online file below. Construct a spreadsheet to answer the following questions. Company Ticker Years to Maturity Yield HSBC 24.75 0.865 GS 4.00 4.351 C 19.25 3.568 MS 27.75 5.084 C 22.50 1.641 TOTAL 17.50 2.257 MS 27.75 3.194 WFC 25.50 4.953 TOTAL 9.25 1.487 TOTAL 21.00 4.449 BAC 12.25 6.662 RABOBK 21.00 1.931 GS 29.00 3.648 AXP 12.25 1.623 MTNA 19.00 2.819 MTNA...

A sample containing years to maturity and yield for 40 corporate bonds are contained in the...

A sample containing years to maturity and yield for 40 corporate bonds are contained in the data given below. Years to Maturity Yield Years to Maturity Yield 23.50 4.757 3.75 2.769 21.75 2.473 12.00 6.293 21.50 4.464 17.50 7.411 23.50 4.684 18.00 3.558 27.00 4.799 8.25 0.945 18.25 3.755 23.25 2.966 15.75 7.068 14.75 1.476 2.00 7.043 10.00 1.382 8.75 6.540 23.00 6.334 5.25 7.000 15.25 0.887 11.25 4.823 4.75 4.810 25.75 1.874 18.00 1.238 14.25 5.654 3.00 6.767 19.25...

yield-to-maturity on long-term government bonds 3.4%. Yield-to maturity on TM Industry's long-term bonds 8.1%. Market risk...

yield-to-maturity on long-term government bonds 3.4%. Yield-to maturity on TM Industry's long-term bonds 8.1%. Market risk premium 6% estimated company equity beta 1.4 stock prince per share $30.00 number of share outstanding 60 million TM industries debt value $1.2 million tax rate 25% 1. It's WACC is: a. 6.46% b. 9.51% c. 8.35% d. 10.16%

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