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Please do part 2 and 3 Question Three. An investment banking client is considering issuing a ten-year bond to finance an acquisition and has asked
Please do part 2 and 3
Question Three. An investment banking client is considering issuing a ten-year bond to finance an acquisition and has asked you what the coupon rate would be on par a bond issued to finance the acquisition. Your capital markets team feels like the company could issue at a stripped spread or ZVOAS of 0.95%. Answer Parts One, Two and Three, given the US Treasury zero coupon bond rates in the table below and the information from the capital markets team. Zero Coupon Bond Rates Part One. What is your estimate of the par coupon rate for a ten-year bond issued by this company? Part Two. What is your estimate of the part coupon rate for a ten-year US Treasury Bond? Part Three. What is static spread over Treasuries on the bond issued by this company? Question Three. An investment banking client is considering issuing a ten-year bond to finance an acquisition and has asked you what the coupon rate would be on par a bond issued to finance the acquisition. Your capital markets team feels like the company could issue at a stripped spread or ZVOAS of 0.95%. Answer Parts One, Two and Three, given the US Treasury zero coupon bond rates in the table below and the information from the capital markets team. Zero Coupon Bond Rates Part One. What is your estimate of the par coupon rate for a ten-year bond issued by this company? Part Two. What is your estimate of the part coupon rate for a ten-year US Treasury Bond? Part Three. What is static spread over Treasuries on the bond issued by this companyStep by Step Solution
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