Activity: Interest Rate Risk Management Using Futures
Fundamental Toys inc. is experiencing substantial growth. You receive an email from Bob.
Email from Bob:
Continuing growth of the company has required that we issue the companys corporate debt soon. As
Chapter 4. Mini Case
Sam Strother and Shawna Tibbs are vice-presidents of Mutual of Seattle Insurance Company and co-directors of the
company's pension fund management division. A major new client, the Northwestern Mu
Accrual Assignment Week 1
Standard Error of
Current Liabilities (6% Interest)
Long-Term Debt (8% Interest)
(Debt Equity Ratio = 1.00)
Total Liabilities and Equity
1. Calculate the HPY on a bond that is currently selling for 105-15 (priced as % of 100% par, in 32nds), has 9 years l
(paid semiannually), coupons can be reinvested at 4%, and your interest rate model expects an 70% probability
Please keep in mind that the dividend given to you in the case is your Do.
It is a multi-step process of using the model of non-constant growth for a stock price calculation.
Calculate the dividends in future years using the growth rates in the ca
Bob has again asked for your help. He needs to figure out the holding period yield on a candidate bond for inclusion in a pension bond portfolio
and whether your company should purchase it. He has left a note on your desk.
1. The future value of the annui
Total current assets
Memo from Bob
Here is an example for the Working Capital Policy Project
Debt Equity Ratio: 1.00
Interest: Short-Term Debt 6%, Long-Term Debt 8%
Tax Rate: 50%
After some preliminary research, using a money center banks swap trading desk and its
traders connections, a possible deal has started taking shape. Another company would be
willing to pay our company a floating rate payment priced at 3-month Libor+25bp,