(EXCEL)On April 15, 2020, Weyerhauser, a Baa2 (Moodys) and BBB (S&P) rated forest management company raised $750 million in a new bond offering. The bond specifies a 4% coupon rate and maturity date of April 15, 2030. It will pay interest in the standard manner on April 15 and October 15, with the first payment on October 15, 2020. At the time of this issue the bond equivalent yield to maturity on the benchmark US Treasury note is 0.813%. The notes price was 98.47.

(a) What is the bond equivalent yield to maturity on this note on its issue date?

(b) What is the continuously-compounded yield to maturity on this note on its issue date?

(c) What is the continuous hazard rate that the market is using to characterize Weyerhausers default probability over the bonds life?

(d) What is the probability that this bond will default (at any point) prior to its maturity?

(e) If you buy this bond at issue and hold it to maturity what is your expected holding period return on this bond?

(f) Suppose that you bought $10,000 par value of this bond on its issue date at the offering price of 98.47, and sell it on October 15, 2020, when its hazard rate and risk premium are unchanged from when you purchased the bond. The bond equivalent yield to maturity on the benchmark US Treasury note has risen from 0.813% to 1.22%. What is your realized continuously compounded holding period return?