Per value bond will exceed the bonds yield to maturity

Assignment Help Financial Management

Reference no: EM13951427

Which one of the following statements is true?

The current yield on a par value bond will exceed the bond's yield to maturity.

A premium bond has a current yield that exceeds the bond's coupon rate.

The yield to maturity on a premium bond exceeds the bond's coupon rate.

A discount bond has a coupon rate that is less than the bond's yield to maturity.

The current yield on a premium bond is equal to the bond's coupon rate.

Reference no: EM13951427

Questions Cloud

Earn on a one-year risk-free us security : The spot rate for the Japanese yen currently is ¥107 per $1. The one-year forward rate is ¥106 per $1. A risk-free asset in Japan is currently earning 7 percent. If interest rate parity holds, what rate can you earn on a one-year risk-free U.S. secur..

Current spot rate-using covered interest arbitrage : The current spot rate is C$1.379 and the one-year forward rate is C$1.319. The nominal risk-free rate in Canada is 4 percent while it is 8 percent in the U.S. Using covered interest arbitrage you can earn an extra _____ profit over that which you wou..

Weight of debt-calculating the cost of capital : Bennington Industrial Machines issued 153,000 zero coupon bonds six years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.3 percent. Interest rates have recently increased, and the bonds now have a yield to maturity o..

How they can improve in processes and increase productivity : Assume Chester Corp. is downsizing the size of their workforce by 20% (to the nearest person) next year from various strategic initiatives. Chester is planning to conduct exit interviews to learn more about how they can improve in processes and inc..

Per value bond will exceed the bonds yield to maturity : The current yield on a par value bond will exceed the bond's yield to maturity. A premium bond has a current yield that exceeds the bond's coupon rate. The yield to maturity on a premium bond exceeds the bond's coupon rate.

Compute the rate of capital for the firm : Compute the rate of capital for the firm for the following: A bond that has a $1000 par value and a coupon interest rate of 12.6% with interest paid semiannually. A new issue would sell for $1,145 per bond and mature in 20 years. The firm's tax rate ..

Offered an investment plan : You have $16,000 you want to invest for the next 32 years. You are offered an investment plan that will pay you 8 percent per year for the next 16 years and 12 percent per year for the last 16 years. How much will you have at the end of the 32 years?..

Would a stock split or a stock dividend suffice : Assume your firm has never distributed cash to its shareholders. However, now you are trying to determine the appropriate way to distribute some cash that is consistent with maximizing shareholder wealth. Why would a dividend distribution be importan..

Bodily injury liability coverage : Thad Joslin was judged at fault in an automobile accident. Three others were awarded damages of $150,000, $75,000, and $75,000. Thad has 100/300 bodily injury liability coverage. What amount, if any, would not be covered by his insurance?

User Account

All Pages