A high coupon bond is likely to be called by issuing firm

Assignment Help Financial Management

Reference no: EM131622436

1. If a bond's price is above its par value, its coupon rate will be

a. less than its yield-to-maturity.

b. greater than its yield-to-maturity.

c. less than its current yield.

d. equal to its yield-to-maturity

2. A high coupon bond is likely to be “called” by the issuing firm if

a. required yields rise.

b. it has a high call premium.

c. it has a low credit rating.

d. the going rate of interest on bonds decreases.

3. Consider a twenty-year bond with a 5% coupon that has a yield to maturity of 7%. If all else remains constant, one year from now the price of this bond will be

a. the same.

b. higher.

c. lower.

d. cannot be determined.

4. Suppose a company has a TIE ratio of 0.85. What might you conclude?

a. The company’s net income will likely be positive.

b. The company’s EBIT is larger than its interest expense.

c. The company does not have enough short-term assets to pay for its short-term liabilities coming due.

d. The company has overextended its usage of debt.

5. Which of the following statements regarding mutual funds is false?

a. All profits are dispensed to shareholders in the form of dividends.

b. Expenses associated with advertising and sales are called 12b-1 fees.

c. Profits earned from the sale of assets within the fund are forwarded to shareholders via ordinary income dividend distributions.

d. Most funds offer an option for automatic dividend reinvestment.

Reference no: EM131622436

Questions Cloud

Determine the payment to amortize the debt : Determine the payment to amortize the debt.

List at least three medications and three treatments : Results." What laboratory values are considered abnormal? Explain each abnormality and discuss the probable causes from a Pathophysiologic Perspective.

Determine the retail price charged to consumers : If the manufacturer sells directly to a retailer who then adds a set margin of 40% based on selling price, determine the retail price charged to consumers.

Discuss what happens if an offerer withdraws the offer : What happens if an offerer withdraws or rescinds the offer. Can this occur

A high coupon bond is likely to be called by issuing firm : If a bond's price is above its par value, its coupon rate will be. A high coupon bond is likely to be “called” by the issuing firm if

Functions of hrm : Discuss the main functions of HRM and what you feel is the most important issue facing HR Managers, employees, and Organizations today.

Why should a large company invest in upgraded it security : Why should a large company (>1000 employees) invest in new or upgraded IT security products and services?

Compute the selling price of the belts : Belts cost $4 and sell with a markup of $2.40. Find the selling price of the belts.

Risk to developing mucor pneumonia : WBC elevated related to infection, lymphocytes 10% due to compromised immune system, PaO2 59 mg the patient is hypoxic on room air;

User Account

All Pages