Objectives of the Report: I. Broad Objective: Broad objective of our report is find the weak regulatory framework‚ supply-side constraints such as a lack of the benchmark bonds‚ demand-side constraints such as the limited investor base‚ a lack of intermediaries with expertise in debt products‚ a lack of confidence in corporate borrowers‚ market distortions which are caused by the National Savings Scheme (NSS) offering above-market returns; and A lack of interest from private companies‚ including
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RIL Bonds The Reliance Group has its businesses in the energy and materials value chain. The annual revenue of RIL is in excess of US$ 34 billion. RIL is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies‚ Reliance pursued a strategy of backward vertical integration - in polyester‚ fibre intermediates‚ plastics‚ petrochemicals‚
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Bond Practice Problems II 1. Seven years ago your firm issued $1‚000 par value bonds paying a 7% semi-annual coupon with 15 years to maturity. The bonds were originally issued at par value. a. What was the original yield to maturity on the bonds? They were issued at par…so the YTM = Coupon rate: 7% b. If the current price of the bonds is $875‚ what is the yield to maturity of the bonds TODAY? 1000 FV .07(1000)÷2= PMT (15-7)*2 = N -875 PV I/Y = 4.623*2 = 9.25% c. If the yield
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Boeing Bond Analysis Presented to Dr. ----- Prepared by Filipe Ferro October 9‚ 2012 Table of Contents Boeing Company 3 Bond Issue 3 Unsystematic Risk 4 Principal Repayment 4 Debt to Invested Capital 4 Debt to Equity 4 Current & Quick Ratios 5 Interest Repayment 5 Times Interest Earned 5 Credit Position 6 Competitor Analysis 6 General Dynamics 6 Northrop Grumman 7 Systematic Risk 7 Market Responsiveness 7 Duration 8 Modified Duration 9 Accuracy of Rating 9
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You have been asked to write a training document about the US Bond Market for use in the new employee-training program. In your document‚ you must make sure to address each of the following: 1a: The key players in the market; and the types of investments available to both individual investors and institutional investors‚ Bond Characteristics A bond is a "security" which gives the holder a financial claim on the issuer. This claim protects the holder in circumstances in which the issuer is
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CHAPTER 12 INTERNATIONAL BOND MARKETS SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS 1. Describe the differences between foreign bonds and Eurobonds. Also discuss why Eurobonds make up the lion’s share of the international bond market. Answer: The two segments of the international bond market are: foreign bonds and Eurobonds. A foreign bond issue is one offered by a foreign borrower to investors in a national capital market and denominated in that
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1. The security of the bond‚ that is‚ whether the bond has collateral. Effect on the coupon rate of the bond issue: Bond’s with collateral will have lower coupon rate as bondholders have claim on collateral no matter what. Advantage: It provides an asset which lower default risk. Disadvantage: Companies cannot sell this collateral as an asset and need to maintain it. 2. The seniority of the bond Effect on the coupon rate of the bond issue: The more senior the bond‚ the lower the coupon
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marks) The yield to maturity on a bond is: (a) based on the assumption that any payments received are reinvested at the coupon rate of return. (b) based on the assumption that any payments received are reinvested at the current yield. (c) below the coupon rate when the bond sells at a discount‚ and above the coupon rate when the bond sells at a premium. (d) none of the above. B. (2 marks) In which one of the following cases is the bond selling at a premium? (a) Coupon
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Bond issue price and premium amortization Bond issue price and premium amortization On January 1‚ 2011‚ Placido Co. issued ten-year bonds with a face value of P1‚000‚000 and a stated interest rate of 10%‚ payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 10 periods at 10% ......................................... .386 Present value of 1 for 10 periods at 12% ...........
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Treasury Bond Yields ______________________________________________________________________ I. Introduction The Federal Open Market Committee raised the federal funds target interest rate from the historically low 1% to 1.25% at its meeting in June 2004. Macroeconomic theory tells us that long-term interest rates tend to move in the same direction‚ and generally in concert with‚ shortterm interest rates (Abel 2005). So‚ we would expect the yield on a long-term asset like the10year Treasury bond‚ which
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