Aleveraged buyout (lbo)

a. is based on an expectation that the new private owners will not restructure the company at any cost.
b. requires the buyer to disclose financial statements of the company once it becomes private.
c. forces shareholders to sell their shares at lower prices than the actual value.
d. changes the ownership structure of a company from public to private.

10.425%

Explanation:

Given :

Present value of bond, PV = 1280

Par value of bond = $1000

Annual coupon rate = 15%

Coupon payment frequency = twice a year (semiannual)

Years to maturity = 10 years

Using the information above by inputting into a financial calculator, the bond's nominal yield to maturity output is : 10.425%

Yield to maturity (YTM) : 10.425%

It could also be used with the PMT value :

PMT = par value * coupon rate /2

PMT = (1000 * (0.15/2)) = $75

PERIOD, n = 10 years ; semiannual = twice a year ;

n = 10 * 2 = 20

Also using this values with the financial calculator, gives 10.425%