The firm retires account payable

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Reference no: EM131982017

1. You buy two bonds:

A: 5% coupon; 5 year term; $1,000 face value; &

B: 5% coupon; 20 year term; $1,000 face value.

a. Price both of the bonds if you want a 5% yield.

b. Price both of the bonds if you want a 8% yield.

c. Compute the percentage price change from your answers in parts a and b for both bonds.

2. If the firm's current ratio exceeds 1:1 and the firm retires an account payable, then the

A) current ratio decreases

B) gross profit margin increases

C) return on equity increases

D) quick ratio increases

Reference no: EM131982017

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