1. List and briefly describe three things that affects yield on a corporate bond. 2. Butch...

 

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1. List and briefly describe three things that affects yield on a corporate bond. 2. Butch Jones Recruiting, Inc. paid a 3-dividend last year. It is expected to grow at only 4% this year, due to heavy funding needs. After that, growth will increase to 10% per year forever. If owners need to earn 18%, What is a fair value? 3. Why do bond issuing firms try to set the coupon rate close to the market yield? 4. Define each of the following terms: a. divided yield, b. capital gains yield, c. expected return om stock. Why are equities riskier than bond and what are the main reason for that? 6. Briefly describe what is a purpose of a Hedge Position? 1. List and briefly describe three things that affects yield on a corporate bond. 2. Butch Jones Recruiting, Inc. paid a 3-dividend last year. It is expected to grow at only 4% this year, due to heavy funding needs. After that, growth will increase to 10% per year forever. If owners need to earn 18%, What is a fair value? 3. Why do bond issuing firms try to set the coupon rate close to the market yield? 4. Define each of the following terms: a. divided yield, b. capital gains yield, c. expected return om stock. Why are equities riskier than bond and what are the main reason for that? 6. Briefly describe what is a purpose of a Hedge Position?

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Three factors which affect yield of bonds are a Time to maturity Bonds with longer time to maturity have higher yields than bonds with shorter maturit... View the full answer