1 ytm has decreased from 9 to 7 which of the following, Ask an Expert

Finance

1. (YTM) has decreased from 9% to 7%. Which of the following statements is true about the current market price of the bond?

a The bond is selling at a discount

b The bond is selling at par

c The bond is selling at a premium

d The bond is selling at book value

e Insufficient information

2. A company is trying to decide between two independent projects. Each project has a cost of capital of 12%. Project A has an IRR of 11.4%. Project B has an IRR of 11.1%. Which project should the company choose if the goal of the firm is to maximize shareholder wealth?

Project

Project B

c) Both projects should be chosen

d) Neither project should be chosen

e) This question cannot be answered unless we know the NPV of each project.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92748459

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