Typically, the yield to maturity on corporate bonds will be ___________ the more restrictions are placed...
Typically, the yield to maturity on corporate bonds will be ___________ the more restrictions are placed on management through restrictive covenants, because ____________.
a. higher; corporate earnings will be lower when a bond has restrictive covenants
b. higher; the bond’s will be considered safer by investors
c. lower; the bonds will be considered safer by investors
d. lower; corporate earnings will be higher when a bond has restrictive covenants
Homework Answers
Option C - Yield on the bond will be lower as restrictive covenants on the management reduce risk as management cannot take arbitrary decisions which might jeopardise the company's performance.
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Typically, the yield to maturity on corporate bonds will be
___________ the more restrictions are placed...
A municipal bond has yield to maturity of 5.08 percent. A comparable corporate bond has yield...
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If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 7.9%, the maturity risk...
If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 7.9%, the maturity risk premium on all 10 year bonds is 1.3%, and corporate bonds have a 0.4% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond? a. 1.51% b. 1.30% C. 1.60% d. 1.46% e. 1.40%
If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 10%, the maturity risk...
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If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 7.9%, the maturity risk premium on all 10 year bonds is 1.3%, and corporate bonds have a 0.4% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond? a. 1.51% b. 1.30% C. 1.60% d. 1.46% e. 1.40%
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