Toyota Motor Credit Corporation

Toyota Motor Credit Corporation - a.Based on the $24,099...

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Toyota  Motor Credit Corporation (TMCC), a subsidiary of Toyota Motor, offered some securities  for sale to the public on March 28, 2008. Under the terms of the deal, TMCC promised to repay  the owner of one of these securities $100,000 on March 28, 2038, but investors would receive  nothing  until then. Investors paid TMCC $24,099 for each of the securities; so they gave up  $24,099 on March 28, 2008, for the promise of a $100,000 payment 30 years later. 
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Unformatted text preview: a.Based on the $24,099 price, what rate was TMCC paying to borrow money? b. Suppose that, on March 28, 2020, this security’s price is $38,260. If an investor had purchased it for $24,099 at the offering and sold it on this day, what annual rate of return would she have earned? c. If an investor had purchased the security at market on March 28, 2020, and held it until it matured, what annual rate of return would she have earned?...
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This note was uploaded on 01/28/2011 for the course FIN 301 taught by Professor Rahman during the Spring '10 term at Post.

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