Coupon payment after six months

Assignment Help Finance Basics
Reference no: EM13790329

Question 1: A ten-year, inflation-indexed bond has a par value of $10,000 and a coupon rate of 5 percent. During the first six months since the bond was issued, the inflation rate was 2 percent. Based on this information, the coupon payment after six months will be $____.

  • 250
  • 255
  • 500
  • 510

Question 2: Municipal general obligation bonds are ____. Municipal revenue bonds are ____.

  • supported by the municipal government's ability to tax; supported by the municipal government's ability to tax
  • supported by the municipal government's ability to tax; supported by revenue generated from the project
  • always subject to federal taxes; always exempt from state and local taxes
  • typically zero-coupon bonds; typically zero-coupon bonds

Question 3: In general, variable-rate municipal bonds are desirable to investors who expect that interest rates will ____.

  • remain unchanged
  • fall
  • rise
  • none of the above

Question 4: When would a firm most likely call bonds?

  • after interest rates have declined
  • if interest rates do not change
  • after interest rates increase
  • none of the above

Question 5: Assume that you purchased corporate bonds one year ago that have no protective covenants. Today, it is announced that the firm that issued the bonds plans a leveraged buyout. The market value of your bonds will likely ____ as a result.

  • rise
  • decline
  • be zero
  • be unaffected

Question 6: Some bonds are "stripped," which means that

  • they have defaulted.
  • the call provision has been eliminated.
  • they are transferred into principal-only and interest-only securities.
  • their maturities have been reduced.

Question 7: (Financial calculator required.) Paul can purchase bonds with 15 years remaining until maturity, a par value of $1,000, and a 9 percent annual coupon rate for $1,100. Paul's yield to maturity is ____ percent.

  • 9.33
  • 7.84
  • 9.00
  • none of the above

Question 8: A ____ has first claim on specified assets, while a ____ is a debenture that has claims against a firm's assets that are junior to the claims of mortgage bonds and regular debentures.

  • first mortgage bond; second mortgage bond
  • first mortgage bond; debenture
  • first mortgage bond; subordinated debenture
  • chattel mortgage bond; subordinated debenture
  • none of the above

Question 9: If a firm believes that it will have sufficient cash flows to cover interest payments, it may consider using ____ debt and ____ equity, which implies a ____ degree of financial leverage.

  • more; less; lower
  • more; less; higher
  • less; more; higher
  • none of the above

Question 10: A sinking-fund provision is a requirement that the issuing firm retire a certain amount of the bond issue each year.

  • True
  • False

Reference no: EM13790329

Valuation of company shares

Access the following site through the AUT library website (search for finance data bases or directly click on the link below) NZX Company Research-includes Capital Raisings Da

What happens if you initially sell dollars for swiss francs

Show how you can make a triangular arbitrage profit by trading at these prices. (Ignore bid-ask spreads for this problem.) Assume you have $5,000,000 with which to conduct the

Hedging-currency derivatives

The Superbowl Champs, New York Giants plans to play in United Kingdom next year. All expenses will be paid by British government and the Giants will receive check for $1mill

Determining the shareholder value

What did you and your classmates learn in our class that can help you "stay in your lane" to increase shareholder value, and when might it be beneficial to go into a differe

Calculate the firm''s operating return on assets

(a) Calculate the firm's operating return on assets. Assume that the firm's year-end total assets balance for the prior year was $6 million. (b) Calculate the firm's net wor

Determine the amount of interest expense

S. Strigel Chemical Corporation issued $5,000,000 face value, 10%, 10-year bonds at $5,679,533. This price resulted in an 8 percent effective-interest rate on the bonds.

Financed by common shares and debt

Halifax Inc. is considering a project that requires an initial investment of $10 million and promises to generate an annual after-tax cash flow of $1 million perpetually.

Evaluate a telephone greeting

Do they sound professional? Is the message clear? How can it be improved? After you receive feedback, re-record your greeting and have your classmates call you again to che

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd