Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1. When you refer to a bond's coupon, you are referring to which one of the following?

A. Difference between the purchase price and the face value
B. Annual interest divided by the current bond price
C. Difference between the bid and ask price
D. Annual interest payment
E. Principal amount of the bond

2. What is the principal amount of a bond that is repaid at the end of the loan term called?

3. Which one of the following terms refers to a bond's rate of return that is required by the market place?

A. Coupon rate
B. Yield to maturity
C. Dirty yield
D. Call yield
E. Discount rate

4. A call provision grants the bond issuer the:

A. right to contact each bondholder to determine if he or she would like to extend the term of his or her bonds.
B. option to exchange the bonds for equity securities.
C. right to automatically extend the bond's maturity date.
D. right to repurchase the bonds on the open market prior to maturity.
E. option of repurchasing the bonds prior to maturity at a pre-specified price.

5. Which one of the following represents additional compensation provided to bondholders to offset the possibility that the bond issuer might not pay the interest and/or principal payments as expected?

A. Interest rate risk premium
B. Inflation premium
C. Liquidity premium
D. Taxability premium
E. Default risk premium

6. The term structure of interest rates is affected by which of the following?

I. interest rate risk premium
II. real rate of interest
III. default risk premium
IV. inflation premium

7. A $1,000 face value bond is currently quoted at 101.2. The bond pays semiannual payments of $27.50 each and matures in 6 years. What is the coupon rate?

8. Best Lodging has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature in 5 years, and have a 6 percent coupon. The current price is quoted at 101. What is the yield to maturity?

9. Last year, you earned a rate of return of 11.29 percent on your bond investments. During that time, the inflation rate was 4.6 percent. What was your real rate of return?

10. 10. When a bond's yield to maturity is less than the bond's coupon rate, the bond:

A. had to be recently issued.
B. is selling at a premium.
C. has reached its maturity date.
D. is priced at par.
E. is selling at a discount

11. What is the name given to the model that computes the present value of a stock by dividing next year's annual dividend amount by the difference between the discount rate and the rate of change in the annual dividend amount?

12. . The price of a stock at year 4 can be expressed as:
A. D0 / (R + G4).
B. D0 ? (1 + R)5.
C. D1 ? (1 + R)5.
D. D4/(R-g).
E. D5/(R-g).

13. The dividend growth model can be used to value the stock of firms which pay which type of dividends?

14. Kate owns a stock with a market price of $31 per share. This stock pays a constant annual dividend of $0.60 per share. If the price of the stock suddenly increases to $36 a share, you would expect the:

I. dividend yield to increase.
II. dividend yield to decrease.
III. capital gains yield to increase.
IV. capital gains yield to decrease

15. The Pancake House pays a constant annual dividend of $1.25 per share. How much are you willing to pay for one share if you require a 15 percent rate of return?

16. Delphin's Marina is expected to pay an annual dividend of $0.58 next year. The stock is selling for $8.53 a share and has a total return of 12 percent. What is the dividend growth rate?

17. Delfino's expects to pay an annual dividend of $1.50 per share next year. What is the anticipated dividend for year 5 if the firm increases its dividend by 2 percent annually?

18. 20. Which one of the following will increase the current value of a stock?

A. Decrease in the dividend growth rate
B. Increase in the required return
C. Increase in the market rate of return
D. Decrease in the expected dividend for next year
E. Increase in the capital gains yield

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M925102

Have any Question? 


Related Questions in Basic Finance

The delta company has issued a total of 25000000 shares of

The Delta Company has issued a total of 25,000,000 shares of common stock at par(its value to the firm is $25, 000,000. The dividend yield is 6%. The company also has $15,000,000 of bonds(also sold at par) with a coupon ...

1 under what circumstances is it acceptable for a

1. Under what circumstances is it acceptable for a researcher to use deception in a study with human participants? 2. What kinds of information must be included accurately as part of the informed consent? (That is, what ...

Finance stock markettwo pages reponse base on my stock

Finance, stock market Two pages reponse base on my stock portfolio. Choose( Apple Inc.) to write the journal and use the S&P 500 data. ASAP !! Your Module 4 assignment will have two parts: 1. Discuss your stock performan ...

1 identity theft tactics name and explain at least three

1. Identity Theft Tactics. Name and explain at least three tactics used by identity thieves to obtain information. 2. Identity Theft. Can identity theft occur through legitimate access to your personal information? Expla ...

Consider a portfolio consisting of 10 million invested in

Consider a portfolio consisting of $10 million invested in the S&P 500, and $7.5 million invested in U.S. Treasury bonds. The S&P 500 has an expected return of 14 percent and a standard deviation of 16 percent. The Treas ...

Rosa inc has arranged a one-year 2 million credit line with

Rosa Inc. has arranged a one-year, $2 million credit line with its lead bank. The bank set the interest rate at the prime rate plus a spread of 1.50 percent. The prime rate is expected to remain stable at 5.25 percent du ...

1 what benefits do flexible unit-load materials have in

1. What benefits do flexible unit-load materials have in contrast to rigid containers? How do return or reverse logistics considerations impact the two approaches? 2. What trade-offs are involved in the use of returnable ...

Advance inc is trying to determine its cost of debt the

Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 16 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has a coupon ra ...

A create a 4-period moving average forecast an exponential

a. Create a 4-period moving average forecast, an exponential smoothing forecast with alpha=0.2, and a linear trend forecast for your data. b. Calculate the MSE and MAD for each. c. Plot the original series, and each of t ...

1 an article in a financial publication observes the higher

1. An article in a financial publication observes: "The higher the expected volatility in stock prices, the higher the prices of put and call options will be." Briefly explain the reasoning behind this observation. 2. An ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro