Cause the value of a bond to increase other things held same

Assignment Help Financial Management

Reference no: EM13732255

Which of the following will cause the value of a bond to increase, other things held the same?

A. the bond is callable

B. interest rates decreased

C. the company's debt rating drops from AAA to BBB

D. investor's required rate of return increases

Reference no: EM13732255

Questions Cloud

Medical expenses-preferred provider organization plan : Margo, age 35, was severely injured in an auto accident. She is covered under her employer’s preferred provider organization (PPO) plan. The plan has a $1000 calendar-year deductible, 80/20 percent coinsurance, and an annual out-of-pocket limit of $3..

Management greed come influence budget decisions : Is it important for a company to follow a strict budget even though they may be experiencing phenomenal profits? Do you think there will a bias towards greed when creating the budget for this company? Explain. How does management greed come influence..

Bonds have a coupon rate : A Heights Inc. bonds have a coupon rate of 7%, a yield to maturity of 10%, a face value of $1,000, and mature in 10 years. Which of the following statements is MOST correct?

The yield to maturity on a bond is the rate of return : The yield to maturity on a bond is the rate of return that equates the present value of the bond's future cash flows with the bonds

Cause the value of a bond to increase other things held same : Which of the following will cause the value of a bond to increase, other things held the same?

Cost of common equity and wacc : Patton Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. It’s before-tax cost of debt is 8% and its marginal tax rate is 40%. The current stock price is P0 = $22.50.

Non constant growth-what is the value of the stock : Micro Tech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Micro tech to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from to..

Instructions with inputs : A company has target weights of debt, preferred and common equity of 20%, 10% and 70%, respectively. It has liquidation values of debt, preferred and common equity of 30%, 15% and 55%. Its book values of debt, preferred and common equity are 40%, 10%..

What are your after tax mortgage payments : You have decided to issue a 30 year fixed rate conventional mortgage to the bank to finance the purchase of a $300,000 home. You are required to make a 20% down payment. The mortgage rate in 5% per year. You will make payments monthly. Please use Exc..

User Account

All Pages