Bonds to fuel their expansion overseas

Assignment Help Financial Management
Reference no: EM131189123

Loan Money To Us, Inc. has issued $10,000,000 of bonds to fuel their expansion overseas. Their bonds were given an "A" rating by both Standard & Poor & Moody's. Which of the following answers are true about their bonds? You may select as many or as few answers as you would like.

a) These bonds are "investment grade"

b) Their coupon payments are normally less than more risky bonds.

c) Their high rating means investors think Loan Money To Us have better growth prospects than their competitors.

d) Their bonds are supposed to have less default risk than bonds rated as "speculative".

e) These bonds are more risky than a bond with a "Aaa" or "AAA" rating.

Reference no: EM131189123

Questions Cloud

Correlation between age and physical flexibility : If the correlation between age and physical flexibility is -.68, what does this mean? How would this correlation look on a scatter diagram?
Demonstrate innovation to solve business problems : Apply knowledge related to fundamental business processes to make effective decisions in the global context - integrate business knowledge to take well-reasoned action in diverse situations.
Needed amount to purchase the boat : Carrie would like to buy a boat that costs $14,300. She currently has $12,500 saved up and intends on investing this amount in an account that earns 8.5% simple interest. How long will it take for her account to reach the needed amount to purchase..
What is the function of the signal sequence located : What is the function of the signal sequence located at the amino terminus of a protein? Which of the following is not a small intracellular signaling molecule (second messenger)?
Bonds to fuel their expansion overseas : Loan Money To Us, Inc. has issued $10,000,000 of bonds to fuel their expansion overseas. Their bonds were given an "A" rating by both Standard & Poor & Moody's. Which of the following answers are true about their bonds? You may select as many or as f..
Paper regarding development of an effective approach : Using the required readings and any other resources you might find helpful, write a paper regarding development of an effective approach to integration of cryptography for your project organization. Be sure to cover the following topics:
How are the 10 decisions of om different : How are the 10 decisions of OM different when applied to the operations manager of a service operation such as Hard Rock versus an automobile company such as Ford Motor Company?
What protein structure results from folding chain caused : What protein structure results from folding or coiling of a polypeptide chain caused by hydrogen bonds between amino acids? In the process of diffusion, net movement of substances is always from a region.
Earnings after taxes and available for common stockholders : Interest versus dividend expense Michaels Corporation expects earnings before interest and taxes to be $50,000 for the current period. Assuming an ordinary tax rate of %35, compute the firm's earnings after taxes and earnings available for common sto..

Reviews

Write a Review

Financial Management Questions & Answers

  Financial and business risks within business structure

With any type of business venture there is always risk involved and we have to look at capital structure decisions as we move through changing economic times. What is a business risk and what are some of the factors that influence a firm’s business r..

  After-tax market rate of return on development investments

The research and development division of a large corporation is considering the purchase of a new tunneling X-ray microscope for $320,125. The projected net benefits from gains in materials engineering is projected to be $127,000 in today’s real doll..

  Compute the percentage total return-capital gains yield

Suppose a stock had an initial price of $121 per share, paid a dividend of $3.30 per share during the year, and had an ending share price of $153. Compute the percentage total return. What was the dividend yield? What was the capital gains yield?

  Market value and the costs of specific sources of capital

The following data regarding the market value and the costs of specific sources of capital. Source of Capital After tax cost Long term debt 8% Common stock equity 19% Market price per share of your common stock is $50 Market value of your long-term d..

  What is the return on debt

Marten Corp has a 14% WACC with a 19% expected return on equity and a 60% debt-to-asset ratio. If Marten pays no income tax, what is the return on debt? If the debt-to-asset ratio increases to 80%, now what is Marten’s WACC?

  Using the internal rate of return

Tall trees inc is using the Internal Rate of Return The IRR when evaluating projects. You have to find the IRR for the companys project. The initial outlay for the project is $450,000. The project will produce the following after tax cash inflows of

  When the external capital market is very relaxed

When the external capital market is very relaxed (e.g., optimistic investors, low interest rate, and many potential investors), would you recommend a start-up firm to use a lot of short-term debt instead of long-term debt? Why or why not? And would y..

  Calculate pcd return on sales and roi for 2014

PCD managers are evaluated and rewarded on the basis of ROI defined as operating income divided by total assets. Barkley Industries expects its divisions to increase ROI each year.

  Outstanding bond issue

Midland Utilities has an outstanding bond issue that will mature to its $1,000 par value in 15 years. The bond has a coupon rate of 11% and pays interest semiannually.

  The tax liability resulting from this sale

A company sold a piece of equipment during the current tax year for $78,600. The accounting records show that its cost basis, B, is $190,000 and the accumulated depreciation is $139,200. Assume that the effective income tax rate is 40%. The tax liabi..

  Expectations theory-what is the markets forecast

Suppose the interest rate on a 1-year T-bond is 5.0% and that on a 2-year T-bond is 6.4%. Assuming the pure expectations theory is correct, what is the market's forecast for 1-year rates 1 year from now?

  Prepare the stockholders equity section of balance sheet

Penn Company was formed on July 1, 2012. It was authorized to issue 300,000 shares of $10 par value common stock and 100,000 shares of 8% $25 par value, cumulative and nonparticipating preferred stock. Penn Company has a July 1–June 30 fiscal year. P..

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