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Municipal bond ratings and rating services have been severely criticized from time to time, yet they survive and prosper. Therefore, they must be useful. How are the services of value to issuers? to
What are the main criticisms that have been levelled against municipal bond rating services? What are the advantages and disadvnatages of replacing the present services with one done by a Federal ag
Calculate the price of a share of stock that is expected to pay a $15 dividend in perpetuity if the stock is priced to yield an 11.5% rate of return.
Problem: A General Motors bond carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 7 percent 1) What interest payments do bondholders receive each year
Does restricting "private-activity" bonds, the solution set forth by the Federal tax reform act of 1986, make sense if applied by the state on local governments? What are the arguments for state res
Problem: A 3yr bond, annual coupon 3.5%, yield 3.8%, last coupon payment just made. Calculate its price and current yield?
You are a fixed income fund manager based in UK. A Hungarian government bond paying annual 8.5% coupon with one year remaining life is trading at 99.55. Spot rate of HUF/GBP is 350.72, one year forw
The bond interest is payable each september 30 and march 31, with the first payment due september 30 year 1. Premium or discount is amortized by straight line method. Year end is dec 31. Calculate t
Question: What is the relationship between the Fed funds rate, the 10 year (US) T-bill and the Mortgage rate?
Question 1: What happens when a country such as Japan dumps American Bonds? Question 2: What happens to the exchange rate? Question 3: What happens to the money supply?
Ginko Inc. has bonds outstanding that mature in 20 years. The bonds have $1000 par value, pay interest annually at a rate of 10 percent, and have a current selling price of $875.25. What
a. What is McCoy's debt-equity ratio? b. What is the firm's weighted average cost of capital? c. What is the cost of capital for an otherwise identical all-equity firm?
Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you expect to offer higher expected returns than corporate bonds?
Discuss the relationship between bond prices and interest rates. What impact do changing interest rates have on the price of long-term bonds versus short-term bonds?
Since the bond is semiannual, pay close attention to coupon payments, periods, and interest rate to be used for discounting bond cashflows; If the bond is currently trading at $935.50, determine wh
A firm has a capital structure with 40% debt, 50% equity, and 10% preferred stock. If the following information is given, calculate company's WACC.
1) IF the O'Meara bonds are noncallable, what is the price of the bonds? 2) If the bonds are callable one year from today at $1,250, will their price be greater than or less than the price you compu
The bonds of Goldman Sack Co. have a conversion premium of $55. Their conversion price is $40. The common stock price is $42. What is the price of the convertible bonds?
a. What is WWI's cost of debt? b. What is WWI's cost of equity? c. What is WWI's weighted average cost of capital?
The required rate of return on these bonds, considering their substantial risk, is now 28 percent. What is the present value of each bond?
The conversion ratio for XYZ convertible debenture is 20. You buy a $1000 of this bond at $100 premium. What is the parity price of XYZ stock?
Jones Corp's EBITDA last year was $385,000 (= EBIT + depreciation + amortization), its interest charges were $10,000, it had to repay $25,000 of long term debt, and it had to make a payment of $20,0
Franklin Corporation is planning to issue new 20-year bonds. Initially, the plan was to make the bond non-callable. If the bond were made callable after 5 years with a 5% call premium, how would thi
Problem: Discuss the relationship between the coupon rate (original interest rate at time of issue) on a bond and its security provisions.