The annual interest divided by the face value of bond

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1. Deltona Motors just issued 225,000 zero coupon bonds. These bonds mature in 20 years, have a par value of $1,000, and have a yield to maturity of 7.45 percent. What is the approximate total amount of money the company raised from issuing these bonds? (Assume semi-annual compounding)

A. $48.20 million

B. $55.14 million

C. $52.10 million

D. $162.08 million

E. $225.00 million

F. None of the answers above are correct

2. The annual interest divided by the face value of a bond is referred to as the:

A. market rate.

B. coupon rate.

C. yield-to-maturity.

D. current yield.

E. call rate.

F. None of the answers above are current

3. Assume that a company’s dividends per share are projected to remain at $1.20 each year, and that its cost of equity capital is 5%. The company’s per-share stock price is close to A) $20 B) $21 C) $23 D) $24

Reference no: EM132030774

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