Calculate the real risk-free rate of return

30-day T-bills are currently yielding 8 percent. Current interest rate premiums: Inflation premium: 5% Liquidity premium: 1% Maturity risk premium: 2%: Default risk premium: 2% Calculate the real risk-free rate of return.

External financing question

Company X expects sales next year = $5,000,000. Inventory and accounts receivable will increase $900,000 to accommodate this sales level. The firm has a steady profit margin of 20% and 40% dividend payout. How much external financing will the firm have to seek?

What is the yield on a Treasury bond that matures in 12 years?

The market expects that inflation will be 3% percent each year for the next 5 years and then the following years will average 5% percent a year. The maturity risk premium is estimated to be MRPt = 0.1(t - 1)%. Maturity risk premium on a two year security is 0.1 percent or 0.001. Real risk-free rate of interest is 3%. What is the yield on a Treasury bond that matures in 12 years?

Yield on an 8-year corporate bond

Real risk-free rate of interest is 2%. Market expects that inflation will 3% each year for the next 5 years. Average 5% a year following Maturity risk premium is estimated to be MRPt = 0.1(t - 1)%. In other Maturity risk premium on a 2 year security is 0.1 %. 10 year corporate bond yields 8.6%. What is the yield on an 8 year corporate bond that has the same default risk and liquidity as the ten-year bond?

Yield on a Treasury bond

The market expects that inflation will be 3% percent each year for the next 5 years and then the following years will average 5% percent a year. The maturity risk premium is estimated to be MRPt = 0.1(t - 1)%. Maturity risk premium on a two year security is 0.1 percent or 0.001. Real risk-free rate of interest is 3%. What is the yield on a Treasury bond that matures in 12 years? a. 8.10% b. 8.27% c. 8.45% d. 8.53% e. 8.68%