When interest rates in the bond market go up
A. the price of existing bonds goes up.
B. there is no impact on the price of existing bonds.
C. the price of stocks goes up.
D. the price of existing bonds goes down.
Answer: D
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A company's capital structure is made up of 40% debt and 60% common equity (both at market values). The interest rate on bonds similar to those issued by the company is 8%. The cost of equity is estimated to be 15%. The income tax rate is 40%
The company's weighted cost of capital is A) 11.5%. B) 12.2%. C) 10.9%. D) 8.9%.
The marginal rate of substitution measures the slope of the:
a. total utility curve. b. demand curve. c. budget line. d. indifference curve.
An appreciation of the U.S. dollar would
a. encourage foreigners to invest in the United States. b. discourage foreigners from buying U.S. goods. c. discourage the travel abroad of U.S. citizens. d. encourage foreign travel in the United States.
According to Malthus, a fixed quantity of land and a growing population combined to produce:
A. accelerating economic growth. B. a stationary state in which growth ceased. C. continuous but variable economic growth. D. a stationary state in which the economy grew, but at a fixed and unchangeable rate.