Which of the following statements is CORRECT?
A. The total return on a bond during a given year is based only on the coupon interest payments received.
B. All else equal, a bond that has a coupon rate of 10% will sell at a discount if the required return for bonds of similar risk is 8%.
C. The price of a discount bond will increase over time, assuming that the bond's yield to maturity remains constant.
D. For a given firm, its debentures are likely to have a lower yield to maturity than its mortgage bonds.
E. When large firms are in financial distress, they are almost always liquidated, whereas smaller firms are generally reorganized.
Answer: C
You might also like to view...
______ is probably the most widely used organizational development intervention technique today.
a. Sensitivity training b. Process consultation c. Forcefield analysis d. Team building
Which of the following staffing models calls for the dominant use of host-country nationals throughout the organization?
A. Regiocentric B. Polycentric C. Ethnocentric D. Geocentric
Disney decided to run its new commercials for all of its theme parks several times a day for three weeks and then not at all for two weeks. It will then run the commercials again for three more weeks. Disney is using a ____ schedule for its advertising.
A. flighting B. varying C. continuous D. pulsing E. beating
Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:•Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. •Collections are expected to be 90% in the month of sale and 10% in the month following the sale. •The cost of goods sold is 75% of sales. •The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. •Other monthly expenses to be paid in cash are $24,700. •Monthly depreciation is $16,000. •Ignore taxes. Balance SheetOctober 31AssetsCash$19,000Accounts
receivable 77,000Inventory 157,500Property, plant and equipment, net of $502,000 accumulated depreciation 1,002,000Total assets$1,255,500Liabilities and Stockholders' EquityAccounts payable$272,000Common stock 780,000Retained earnings 203,500Total liabilities and stockholders' equity$1,255,500Accounts payable at the end of December would be: A. $96,000 B. $135,000 C. $240,000 D. $231,000