•Note the following yields: 10 year treasury 2.37%, 10 year AAA
rated bond credit spread 0.90% (90 basis points), BBB rated bond
credit spread 1.20% (120 basis points). What is the price of a 10
year bond, $1000 par value, with a coupon rate of 6% that pays
interest semi-annually and has risk similar to a BBB rated
corporate bond?
•Suppose Company X has earnings next year of $1.00 and grows
earnings by 40% for 2 years and will grow...