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43) Which is a term that would be included in a bond indenture? a) Interest rate b) Dividend c) Share price d) Trustee e) Written agreement

43) Which is a term that would be included in a bond indenture? a) Interest rate b) Dividend c) Share price d) Trustee e) Written agreement

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I need help with questions 43 and below pls
41) What is the coupon rate of Bank of America's bond? a) $1,000,000 b) 12% c) 30 years d) $120,000 e) Unable to calculate 42) Which is true regarding debt and equity securities? a) Equity represents something which must be repaid b) Debt is considered ownership of the company c) Dividend payments are a cost of doing business d) Unpaid debt is a liability of the business e) All of the above 43) Which is a term that would be included in a bond indenture? a) Interest rate b) Dividend c) Share price d) Trustee e) Written agreement 44) Which is the definition of a protective covenant? a) Bonds are repaid at maturity, where investors receive face value b) Sinking fund c) An agreement giving the corporation the option to repurchase a bond at a specified price prior to maturity d) Part of a bond indenture which limits certain actions of a company that it may wish to undertake e) The preference a bond issue has over other lenders 45) If a bond is considered "Below Investment Grade", what could its rating be? a) AAA b) CCC+ c) Garbage d) BB+ e) Venezuela 46) Pete "Polar Bear" Alonso wants to purchase a bond with the highest tax-affect yield. He has a choice between a New York City municipal bond yielding 4.09% or a AAA-rated Coca Cola bond yielding 4.38%. His tax rate is 30%. Assuming the Polar Bear is a rational (and that is a stretch), which bond would be prefer? a) Neither, as he doesn't understand how to calculate tax-affected yields b) New York City bond c) Both, tax-affected yield is exactly the same d) Coca Cola e) His tax bracket is wrong
Transcribed Image Text:41) What is the coupon rate of Bank of America's bond? a) $1,000,000 b) 12% c) 30 years d) $120,000 e) Unable to calculate 42) Which is true regarding debt and equity securities? a) Equity represents something which must be repaid b) Debt is considered ownership of the company c) Dividend payments are a cost of doing business d) Unpaid debt is a liability of the business e) All of the above 43) Which is a term that would be included in a bond indenture? a) Interest rate b) Dividend c) Share price d) Trustee e) Written agreement 44) Which is the definition of a protective covenant? a) Bonds are repaid at maturity, where investors receive face value b) Sinking fund c) An agreement giving the corporation the option to repurchase a bond at a specified price prior to maturity d) Part of a bond indenture which limits certain actions of a company that it may wish to undertake e) The preference a bond issue has over other lenders 45) If a bond is considered "Below Investment Grade", what could its rating be? a) AAA b) CCC+ c) Garbage d) BB+ e) Venezuela 46) Pete "Polar Bear" Alonso wants to purchase a bond with the highest tax-affect yield. He has a choice between a New York City municipal bond yielding 4.09% or a AAA-rated Coca Cola bond yielding 4.38%. His tax rate is 30%. Assuming the Polar Bear is a rational (and that is a stretch), which bond would be prefer? a) Neither, as he doesn't understand how to calculate tax-affected yields b) New York City bond c) Both, tax-affected yield is exactly the same d) Coca Cola e) His tax bracket is wrong
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