You are managing a portfolio of $1 million. Your target duration is 10 years, and you can invest in two bonds, a zero-coupon bond with maturity of five years and a perpetuity, each currently yielding 5.6%.

a. What weight of each bond will you hold to immunize your portfolio? (Round your answers to 2 decimal places.)
Zero-Coupon Bond . %
Perpetuity Bond %
b. How will these weights change next year if target duration is now nine years? (Round your answers to 2 decimal places.)
Zero-Coupon bond . %
Perpetuity bond . %

How supply and demand work together to reach the equilibrium price in the marketplace? give at least a paragraph. you!

Granby foods' (gf) balance sheet shows a total of $25 million long-term debt with a coupon rate of 8.50%. the yield to maturity on this debt is 8.00%, and the debt has a total current market value of $27 million. the company has 10 million shares of stock, and the stock has a book value per share of $5.00. the current stock price is $20.00 per share, and stockholders' required rate of return, r s, is 12.25%. the company recently decided that its target capital structure should have 35% debt, with the balance being common equity. the tax rate is 40%. calculate waccs based on book, market, and target capital structures. what is the sum of these three waccs?

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