B26 v fx 3.66 B C D E H 1 Capital Structure Information 4 5 Price 6 Source 7 Debt 8 Preferred 9 Common 10 Totals 11 12 13 Tax Rate 14 Coupon Rate 15 Face Value 16 Maturity 17 Yield to Maturity 18 19 20 21 Dividend 704.53 100.00 Please fill in the yellow boxes given the inforamtion to the left. These represent the current costs of financing 70.00 Additional Bond Data 30% 10% 1,000.00 10 Additional Preferred Data 10.00 22 Required Return 23 24 25 Additional Common Data 26 Dividend 0 27 Growth Rate 28 Required Retum 3.66 6%

Bond Price ($) 50 3,300 3,000- 2,500- 2,000- 1,500- 1,000 810.71- 500- 0 5 10 8 Interest Rate (%) Convexity 15 6 717) The shape of the curve implies that an increase in the interest rate results in a price decline that is smaller than the price gain resulting from a decrease of equal magnitude in the 8 interest rate. This property of bond price is called? 19 20 Duration G 118) The Tangent line represented on the chart is a representation of an estimation of bond price change relative to a change in interest rate. It is known as? 52 Higher H 53 54 55 19) If Duration is estimation of an approximate change in price relative to a change in interest rate, the error in approximation will be (Higher/Same/Lower) for abond with higher 56 convexity? 57 58 co

| Technology Services | VCU Security Treasury AAA Corporate BBB Corporate B Corporate Consider the following yields to maturity on various one-year, zero-coupon securities: 0.60% The credit spread of the single B corporate bond is closest to 1.10% 1.40% virginiacommonwealth.instructure.com 0.80% 1.60% Yield (%) 5.0 5.2 5.8 6.6 Video Quiz Chapter 6: FIRE 311 Sec Review Video Lecture Part 6.5

Please answer as many parts as possible