1)If the required rate of return is less than the coupon rate of the bond, then the bond will be sold with: Prim Book value Nominal value Discount
1)If the required rate of return is less than the coupon rate of the bond, then the bond will be sold with: Prim Book value Nominal value Discount
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
1)If the required rate of return is less than the coupon rate of the bond, then the bond will be sold with:
Prim
Book value
Nominal value
Discount
2)Find the correct alternative, from the security’s issuer point of view:
The preferred stock is more risky than the bond
The bond is more risky than common stock
Common stock is more risky than preferred stock
The zero coupon bond is more risky than the ordinary bond
3)The Preemptive Right of the common stocks:
Offers higher rate of returns for new stockholders
The new common stocks have no voting rights
Offers higher rate of returns for current stockholders
Protects the power of control of current stockholder
4)Which of the following investors ranks last in terms of profit (earning) distribution?
Bond holders
Preferred stock holders
Zero interest bond holders
Common stocks holders
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