to increase the confidence level of the potential bond buyers on its bonds, a bank should ( maybe more than one answer) retire stocks issue more stocks
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to increase the confidence level of the potential bond buyers on its bonds, a bank should ( maybe more than one answer)
retire stocks
issue more stocks
increase dividend
decrease dividend
increase
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- To increase the confidence level of the potential bond buyers on its bonds, a bank should (maybe more than one answer) Question 23 options: retire stocks. issue more stocks. increase dividend. decrease dividend. increase retained earnings.The time value of money is used in calculating bond prices because: Group of answer choices A - The company might choose to repay the bonds prior to their maturity date B - Bond investors receive future payments and purchase bonds with current dollars C - The amount to be repaid at maturity will change as market rates change D - Cash interest payments to bondholders will change as market rates changeIf given the original value (par value) and market price (the price the bond sold for), how do youknow if the bond is being issued at a discount or a premium? 2. As an investor, would you want to buy a bond at a discount or premium? Explain the reasoningbehind your choice. 3. Explain how a company's Income Statement is affected by treasury stock transactions?
- These are corporate bonds that have a higher rate of return with a higher level of risk? Group of answer choices Revenue bonds Junk bonds GOBs Tax increment bondsWhat effect does the trend in stock prices (subsequent to issue) have on a firm’s ability to raise funds through: (a) convertibles and (b) warrants?la bonitob at bloky enig (7.8) The interest rate investors expect on a new bond issue can be determined by computing the for the company's Alternatively, it is possible on newly to determine the cost of new debt financing by finding the issued bond with similar (7.9) The firm's overall measure of the cost of capital is the cost of debt is the The dollar cost of equity is overall firm average cost of capital is the cost of equity plus the cost of debt, divided by The dollar (7.10) Interest (is / is not) a tax-deductible expense, and dividends paid to stockholders (are / are not). The payment of interest reduces the firm's taxes by after-tax cost of debt in dollars equals The after-tax cost of debt in percentage terms is WACC = dito The The
- 1. The face value or the amount returned to the bondholder at maturity is known as the coupon interest rate par value Asset amount Corporate bond 2. Bonds help produce steady income True FalseCommon stocks typically have which of the following that bonds do NOT have? 1. I. Voting rights 2. I1. Fixed cash flows 3. Ill. Set maturity date 4. IV. Tax deductibility of cash flows to investors6. Bonds and stocks are two financial products. Prepare a briefing note on these two financial products that are the core offerings of a financial market. Provide a comparison of these products. What characteristics of bonds and stocks explain the valuation strategy of each of these financial products? How will you adapt the growth stages model to value stocks (i) in the very long run; and (ii) for a company with no history of dividend payments. Prepare a briefing note for your brokerage.
- If a firm increases its financial risk by selling a large bond issue that increases its financial lewverage explain this assumption?Also what is the relationshipbetween risk and return. Explain with examples bold examples.1. Rank bonds, common stock, and preferred stock with regard to two factors the possibility of a substantial increase in value. Rank these same securities with regard to investors' legal claims for repayment on their investments. 2. Would a relatively high P/E ratio lead us to conclude that a stock is overvalued or undervalued? Why or why not? 3. Explain how a consumption tax could lead to a decrease in real interest rates. 4. List and discuss the various reasons that contributed to the financial crisis that occurred in 2008.Briefly explain how the yield to maturity (YTM) of a corporate bond is calculated. Is this the expected return an investor should expect for investing in the bond? Why or why not?
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