Question: Explain in detail why the highlighted is the answer. A firm issues 20 -year bonds with an annual coupon rate of 4.8%. The credit spread

Explain in detail why the highlighted is the answer.

A firm issues 20 -year bonds with an annual coupon rate of 4.8%. The credit spread for this firm's 20 -year debt is 1.2% per year. New 20 -year Treasury notes are being issued at par with an annual coupon rate of 4.6%. What should the price of the firm's outstanding 20 -year bonds be if their face value is $1000 ? $1000.86 $975.98 $937.48 $981.23

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

what equation do i use to solve this and how A firm issues 20 -year bonds with an annual coupon rate of 4.8%. The credit spread for this firm's 20-year debt is 1.2\% per year. New 20-year Treasury...

A firm issues 20 -year bonds with a coupon rate of 4.1 %, paid semiannually. The credit spread for this firm's 20 -year debt is 1.2%. New 20 -year Treasury notes are being issued at par with a coupon...

Places answer all question. Thanks Question 8 1.5 pts A firm issues ten-year bonds with a coupon rate of 7.8%, paid semiannually. The credit spread for this firm's ten-year debt is 2.4%. New ten-year...

answers are given, please show calculations. 11. A firm, issues two-year bonds with a coupon rate of 6.7%. paid semiannually The credit spread for this firm's two-year debt is 0.8% New two-year...

Please explain by steps A firm issues 5- year bonds with a coupon rate of 4.7%, paid semiannually. The credit spread for this firm's 5- year debt is 1.2%. New 5- year Treasury notes are being issued...

Question:4/10 Have been answered, I need those double checked for accuracy and then the other 6 to be answered and explained how you got to the answer either hand written or by equation typed out....

d New Wave Inc, reported earnings per share of $0.95 in 2021 on EBIT of $60 million and revenues of $650 million. The firm has 40 million shares outstanding. It had capital expenditures of $0.25 per...

Old MathJax webview CH10 The following information relates to Questions 8 & 9 Daniela Ibarra is a senior analyst in the fixed-income department of a large wealth management firm. Marten Koning is a...

Can anyone please answer these questions? 1) 1) Five years ago you took out a 30-year mortgage with an APR of 6.40% for $196,000. If you were to refinance the mortgage today for 20 years at an APR of...

I need all these questions answered.. Thank you 1. The Modified Accelerated Cost Recovery System (MACRS) specifies which of the following depreciation methods for buildings? A. 150%...

A clock starts on the ground and then moves up a tower at constant speed v. It sits on top of the tower for a time T and then descends at constant speed v. If the tower has height h, how long should...

1. Download the cost baseline template. 2. Use the information below to create a time-scaled network diagram (FS = finish-to-start) honoring all dependencies. Assume early start dates for each work...

True or false assuming a stock has a super normal growth. Followed by constant growth the model is assume a linear declining growth over the super normal.

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".