Company XYZ 4.5 of 11/16/2028 Bond has A rating; bonds with that rating have 150 bps spread
Question:
Company XYZ 4.5 of 11/16/2028
Bond has "A" rating; bonds with that rating have 150 bps spread
Similar risk-free bond yield 5%
What is price?
Spreads narrow from 150 to 100
Risk free rate increases 25
New price?
If you have a price quote
Corporate ABC 7.2% of 11/16/2029 is quoted 105.20/105.80
What price would you pay if BUYING this bond?
A 2029 GOC bond yields 4.5%
What is YTM, spread?
What if this bond is callable?
Call date is 11/16/2027 at 103.50
what is YTC?
Is the bond likely to be called?
What is the Macaulay Duration of
Corporate ABC 7.2% of 11/16/2029 at price 105.80
What is the Modified Duration? Corporate ABC 7.2% of 11/16/2029 at price 105.80
If Interest rates increase by 1%
• What the approximate price of the bond? • If you included convexity, would bond price be lower or higher
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford