Question: i need help with this question Suppose Highlander Enterprises is planning to massively expand its manufacturing facility and will issue 15-year corporate bonds to obtain
Suppose Highlander Enterprises is planning to massively expand its manufacturing facility and will issue 15-year corporate bonds to obtain funding for the project. Prior to issuing the corporate bonds, Highiander Enterprises must determine the yield that it must offer to successfully sell the debt securities. Upon further analysis of the key characteristics used to determine the appropriate vield of a bond, Highlander Enterprises learns the following: 1. The annualized veld on a risk-free 15-year Treasury bond Is 8 percent, 2. A 3 percent credit risk premium is needed to compensate investors for credit risk. 3. A 0.6 percent liquidity premium is needed to compensate Investors due to the low liquidity of the bands. 4. A 0.4 percent tax adjustment is needed to compensate investors for a difference in tax status What is the appropriate veld to be offered on the corporate bonda? 6.009 9.60% 12.00% 16.80%
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