If market interest rates rises

Assignment Help Financial Management

Reference no: EM13948545

If market interest rates rises?

short-term bonds will rise in value more than long-term bonds,

long-term bonds will decline in value more than short-term bonds,

long-term bonds will rise in value more than short-term bonds,

short-term bonds will decline in value more than long-term bonds.

Reference no: EM13948545

Questions Cloud

What is the company pretax cost and aftertax cost of debt : Drogo, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 10 years to maturity that is quoted at 108 percent of face value. The issue makes semiannual payments and has an embedded cost of 9 percent annually. Wha..

DCF method and SML method : Epley Industries stock has a beta of 1.30. The company just paid a dividend of $.30, and the dividends are expected to grow at 4 percent. The expected return on the market is 13 percent, and Treasury bills are yielding 4.5 percent. The most recent st..

Fixed rate of interest for five years : Company X is based in the United Kingdom and would like to borrow $50 million at a fixed rate of interest for five years in U.S. funds. Because the company is not well known in the United States, this has proved to be impossible. Suggest an appropria..

A project that carries normal amount of risk : A project that carries a normal amount of risk and does not affect the risk exposure of the firm should be discounted back at the: Select one: a. coefficient of variation b. beta c. risk-free rate d. weighted average cost of capital

If market interest rates rises : If market interest rates rises?

Maintain growth rate-what must the dividend payout ratio be : Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm maintains a constant debt-equity ratio of .55, a total asset turnover ratio of 1.30, and a profit margin of 9 percent. What must..

Using the risk-adjusted discount rate approach : Using the risk-adjusted discount rate approach, the firm's weighted average cost of capital is applied to projects with: Select one: a. no risk b. low risk c. normal risk d. high risk

Rise for the option strategy to be more profitable : The current price of a stock is $84, and three-month European call options with a strike price of $85 currently sell for $4.20. An investor who feels that the price of the stock will increase is trying to decide between buying 100 shares and buying 2..

What is the cash flow in year two of the project : A potential project requires the purchase of $612,000 of equipment. The equipment will be depreciated straight-line to a zero book value over the three-year life of the project. Net working capital equal to 25 percent of sales will be required to sup..

User Account

All Pages