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Essentials Of Investments
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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1. The capital structure.of a firm is the total capital divided by the ordinary shares and preference 2. Discount bonds are bonds that are issued at their face value. 3. Ordinary shares represent a residual ownership position in the corporation 4. Investment projects should not be accepted if their NPV is equal to zero. 5. Intrinsic value of a security is the value that the security is currently trading in the market. 6. The market price of common stock is determined by individuals buying and selling the stock. 7. If two mutually exclusive projects have positive NPV, both should be accepted by management. 8. The price at which the bond is traded in the stock exchange is the maturity value. 9. Coefficient of variation is a measure of relative risk. Page 2 of 10
Transcribed Image Text:1. The capital structure.of a firm is the total capital divided by the ordinary shares and preference 2. Discount bonds are bonds that are issued at their face value. 3. Ordinary shares represent a residual ownership position in the corporation 4. Investment projects should not be accepted if their NPV is equal to zero. 5. Intrinsic value of a security is the value that the security is currently trading in the market. 6. The market price of common stock is determined by individuals buying and selling the stock. 7. If two mutually exclusive projects have positive NPV, both should be accepted by management. 8. The price at which the bond is traded in the stock exchange is the maturity value. 9. Coefficient of variation is a measure of relative risk. Page 2 of 10
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