Which of the following lowers the required interest rate that firms have to pay on their bonds?  Which of the following raise the interest that firms have to pay? Private placements Public offerings Sinking fund provisions Protective Covenants Call provisions Collateral An active secondary market A low credit rating

Q: A bond's price would likely fall as a result of any of the following except contraction of the…

A: The correct option isD) heavy Federal Reserve buying on the open marketExplanation :-Therefore,…

Q: Which of the following statements is incorrect? Group of answer choices Unsystematic risk can be…

A: Introduction: Unsystematic risk is the risk that is specific to an industry and this risk is…

Q: Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a…

A: Corporate Bond: Bonds issued by companies, whether they be public or private, are considered to be…

Q: Which bond usually will have a higher liquidity premium:one issued by a large company or one issued…

A: The liquidity premium may be a premium asked by speculators when the reasonable market value of any…

Q: Which of the following is not a main core function of the financial system? a. Provide a payments…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: When a firm gets riskier what will happen to its bonds Multiple Choice   the stated interest rate…

A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…

Q: (please all options information and correct answer) Decreases in the following factors that will…

A: A bond refers to a fixed-income investment instrument issued by governments, municipalities, or…

Q: A problem of financing with debt ( bonds) is that Group of answer choices the price of new bond…

A: The question is asking about the potential problems or challenges that can arise when a company…

Q: When market volatility increases, does that increase, decrease, or have no effect on the credit…

A: Market Volatility means deviation of market for a specific period.  The difference between the yield…

Q: Does a steady low-volatility environment, increase, decrease, or have no effect on the credit spread…

A: answer are as follows.

Q: Which of the following will increase a firm's aftertax cost of debt financing? Select one: a.…

A: Cost of debt is usually computed on an after tax basis. This is because the interest expenses are…

Q: he following statements is TRUE? emand for a bond declines when it becomes less liquid, decreasing…

A: A liquid asset is one that can be converted to cash quickly and easily. Liquid assets include cash,…

Q: Why would a company typically choose to source external financing by issuing bonds rather than…

A: Bonds are debt instruments that are used by institutions to raise capital. The face value and the…

Q: Why is it said that zero-coupon bonds lock in the reinvestment rate?

A: The objective of the question is to understand why it is said that zero-coupon bonds lock in the…

Q: Beacuase the conversion feature in a convertible bond is valuable to  bondholders, convertible bond…

A: No, the company cannot lower the cost of borrowing by selling the convertible debt.

Q: Why are investment-grade bonds more marketable and why are junk bonds issued at all?

A: Introduction: Bond is nothing but debt securities issued by a company or government if they want to…

Q: Are interest rates of junk bonds always higher or lower than investment-grade bonds? Why?

A: A bond is a financial instrument that pays interest to the investor periodically and return of…

Q: if we see an increase in default rates, what may that mean for the junk bond market and for…

A: Junk bonds are those bonds that carry a very high risk of default.  These bonds are issued by…

Q: Why might a firm prefer to finance its investments with bonds rather than stocks? Alternatively, why…

A: Introduction: Bond is nothing but debt securities issued by a company or government if they want to…

Q: Investors invest in Fixed Income securities (i.e., bonds) for the passive income that comes from…

A: In this question, we are required to determine whether the given statement is true or false.

Q: Why are long-term corporate bonds higher risk than short-term corporate bonds? Provide an example

A: Longer term bonds have higher risks than short term bonds due to their duration and time period.…

Q: When estimating cost of debt, the firm should not simply use current short-term rates because these…

A: When estimating the cost of debt, firms typically should not simply use current short-term rates…

Q: What is meant by coupon stripping in the Treasury market?

A: Coupon stripping is the separation of an instant bond's periodic interest bills from its foremost…

Q: Explain why corporate bonds’ default and liquidity premiums are likely to increasewith their…

A: solution: corporate bonds yield higher more than treasury bills due to their additional default and…

Q: Under which of the following situation, would a firm most likely to  call its outstanding callable…

A: Callable bonds are a type of bond that can be redeemed or called by the issuer before maturity.…