Finance test help needed

Oct 23rd, 2015
Business Finance
Price: $5 USD

Question description

1.Which of the following statements is CORRECT?


If a coupon bond is selling at a premium, its current yield equals its yield to maturity.


If a bond's yield to maturity exceeds its annual coupon, then the bond will trade at a premium.


If a coupon bond is selling at par, its current yield equals its yield to maturity.


If a coupon bond is selling at a discount, its price will continue to decline until it reaches its par value at maturity.


If interest rates increase, the price of a 10-year coupon bond will decline by a greater percentage than the price of a 10-year zero coupon bond.

2.Operating leases help to shift the risk of obsolescence from the user to the lessor.



3.Because of improvements in forecasting techniques, estimating the cash flows associated with a project has become the easiest step in the capital budgeting process.



4.The "preferred" feature of preferred stock means that it normally will provide a higher expected return than will common stock.



5.If a firm's goal is to maximize its earnings per share, this is the best way to maximize the price of the common stock and thus shareholders' wealth.



Tutor Answer

(Top Tutor) Lessermaster
School: Purdue University

Studypool has helped 1,244,100 students

Review from student
" Goes above and beyond expectations ! "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1825 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors