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Rolling the die a total of 60 times, what is the distribution of the possible cash flows?
If a corporation were to issue both a convertible bond and a nonconvertible bond-both identical except for the conversion feature.
Why would an issuer that needs floating-rate financing issue a fixed-rate bond combined with an interest rate swap?
When using a swap to design a bond structure, explain why an issuer must be concerned with counterparty risk.
Explain how the CFO can use interest rate futures to protect against a rise in Treasury rates.
How can an issuer protect against an adverse change in the spread when it expects to issue bonds in the future?
For the first year, the interest rate is 12%. Determine the amount of the monthly payment for the first 12 months and construct an amortization schedule .
he Can Sell Company issued $200 million of 8% coupon bonds that mature in 15 years. These bonds pay interest semiannually.
The Drifter Corporation has $100 million in floating-rate notes outstanding, with interest paid quarterly.
What is the amount of interest expense per bond that Cipher deducts each year per $1,000 maturity value?
What is the rate on the synthetic fixed-rate bond created and compare this rate to that of a fixed-rate bond that Banner Products could have issued?
If Chuckie Munchies Company issued a bond whose coupon rate is tied to the S&P 500, what risk is it facing?
If the price of a share of stock is $26, what is the minimum price you would be willing to pay for the warrant?
If the common stock is trading for $60 a share, what is the conversion value of the bonds?
If the common stock is trading for $30 a share, what is the conversion value of these bonds?
List all the embedded options in these bonds, identifying the party that has the option to exercise.
If there are no flotation costs, what is the face value of new 6% bonds that must be issued to refund the existing bonds?
If there is a 1% increase in units sold, what do you expect to be the change in operating cash flows?
What is the current break-even number of units for Jonhaux considering all fixed costs?
If the yield-to-maturity on these bonds changes from 4% to 6%, which bond's value changes the most?
Suppose you want to earn a rate of 8% after inflation. If you expect inflation to be 4% during the next year, what nominal rate of return.
What is the standard deviation of possible sales of this new product?
he HI bond has a 10% coupon rate and the LI bond has a 5% coupon rate. Both bonds pay interest annually and are priced to yield 10%.
Suppose the expected risk-free rate is 5% and the expected return on the market is 12%.
Why does the cost of debt differ from the required rate of return on debt for the same firm?