Questions from Corporate Finance

Q: Explain why bond issuers might voluntarily choose to put restrictive covenants into

Explain why bond issuers might voluntarily choose to put restrictive covenants into a new bond issue.

Q: General Electric has just issued a callable 10-year, 6

General Electric has just issued a callable 10-year, 6% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a pric...

Q: Explain why the yield on a convertible bond is lower than the

Explain why the yield on a convertible bond is lower than the yield on an otherwise identical bond without a conversion feature.

Q: Why do bonds with lower seniority have higher yields than equivalent bonds

Why do bonds with lower seniority have higher yields than equivalent bonds with higher seniority?

Q: Your firm has identified three potential investment projects. The projects and

Your firm has identified three potential investment projects. The projects and their cash flows are shown here: Suppose all cash flows are certain and the risk-free interest rate is 10%. a. What is...

Q: Explain the difference between a secured corporate bond and an unsecured corporate

Explain the difference between a secured corporate bond and an unsecured corporate bond.

Q: What is the difference between a foreign bond and a Eurobond?

What is the difference between a foreign bond and a Eurobond?

Q: Describe the kinds of securities the U.S. government uses

Describe the kinds of securities the U.S. government uses to finance the federal debt.

Q: Suppose on January 15, 2013, the U.S.

Suppose on January 15, 2013, the U.S. Treasury issued a five-year inflation-indexed note with a coupon of 3%. On the date of issue, the consumer price index (CPI) was 250. By January 15, 2018, the CPI...

Q: On January 15, 2020, the U.S. Treasury

On January 15, 2020, the U.S. Treasury issued a 10-year inflation-indexed note with a coupon of 6%. On the date of issue, the CPI was 400. By January 15, 2030, the CPI had decreased to 300. What princ...