Questions from Corporate Finance

Q: What is the price of a five-year, zero-

What is the price of a five-year, zero-coupon, default-free security with a face value of $1000? Data for Problem 18:

Q: What is the price of a three-year, default-

What is the price of a three-year, default-free security with a face value of $1000 and an annual coupon rate of 4%? What is the yield to maturity for this bond? Data for Problem 19:

Q: What is the maturity of a default-free security with annual

What is the maturity of a default-free security with annual coupon payments and a yield to maturity of 4%? Why? Data for Problem 20:

Q: Consider a four-year, default-free security with annual

Consider a four-year, default-free security with annual coupon payments and a face value of $1000 that is issued at par. What is the coupon rate of this bond? Data for Problem 21:

Q: Consider a five-year, default-free bond with annual

Consider a five-year, default-free bond with annual coupons of 5% and a face value of $1000. a. Without doing any calculations, determine whether this bond is trading at a premium or at a discount. Ex...

Q: What is the difference between a public and a private corporation?

What is the difference between a public and a private corporation?

Q: Prices of zero-coupon, default-free securities with face

Prices of zero-coupon, default-free securities with face values of $1000 are summarized in the following table: Suppose you observe that a three-year, default-free security with an annual coupon rat...

Q: Assume there are four default-free bonds with the following prices

Assume there are four default-free bonds with the following prices and future cash flows: Do these bonds present an arbitrage opportunity? If so, how would you take advantage of this opportunity? If...

Q: Suppose you are given the following information about the default-free

Suppose you are given the following information about the default-free, coupon-paying yield curve: a. Use arbitrage to determine the yield to maturity of a two-year, zero-coupon bond. b. What is the...

Q: Explain why the expected return of a corporate bond does not equal

Explain why the expected return of a corporate bond does not equal its yield to maturity.