In 2012, Anheuser-Busch In Bev NV, maker of Budweiser and other beers, sold debt of varying maturities.
Question:
In 2012, Anheuser-Busch In Bev NV, maker of Budweiser and other beers, sold debt of varying maturities. According to an article in the Wall Street Journal:
The three-year notes priced with a risk premium of 0.50 percentage point over comparable Treasurys; the five-year notes at a spread of 0.80 percentage point to Treasurys; the 10-year notes at 1.05 percentage points over; and the 30-year bonds at a spread of 1.20 percentage points over Treasurys.
a. What does the article mean by “comparable Treasurys”?
b. What does the article mean by a “risk premium”?
c. Why does the risk premium increase the longer the maturity of Anheuser-Busch’s debt?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Money Banking And The Financial System International Edition
ISBN: 978-1292000183
2nd Edition
Authors: R. Glenn Hubbard ,Anthony P Obrien
Question Posted: