On january 30 2012 the darden company is considering two


On January 30, 2012, the Darden Company is considering two T-bonds as potential bonds for delivery against the June 2012 T-bond futures contract. The contract's current price is 102 8/32. The first bond has a coupon rate of 7 ¼ percent and matures on May 15, 2036. It has a current market price of 105.00. The second bond has a coupon rate of 5 ¾ percent and matures on May 15, 2034. It has a current market price of 87.00. The June contract expires on June 15th and the settlement price on June 15th is 114.00. The reinvestment rate available to the Darden Company is 3 percent. Determine which bond would be the cheapest-bond-to-deliver. Show all your calculations.

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Financial Management: On january 30 2012 the darden company is considering two
Reference No:- TGS02847970

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