Which of the following statements is true?
A) When investors' required rate of return equals the bond's coupon rate, then the market value of the bond may be selling at par value.
B) When investors' required rate of return exceeds the bond's coupon rate, then the market value of the bond will be greater than par value.
C) When investors' required rate of return is less than the bond's coupon rate, then market value of the bond will be greater than par value.
D) When investors' required rate of return is less than the bond's coupon rate, then the market value of the bond will be less than par value.
Answer: C
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The Sarbanes-Oxley Act:
A. motivates executives to inflate reports of corporate profits. B. gives corporations greater freedom from government control. C. adopts the theory of allocational efficiency. D. raises the penalties for illegal behavior.
If no beneficiary is mentioned in a life insurance, then the proceeds of the insurance go to the insured's estate
Indicate whether the statement is true or false
Which of the following statements is CORRECT?
A. Using accelerated depreciation rather than straight line would normally have no effect on a project's total projected cash flows but it would affect the timing of the cash flows and thus the NPV. B. Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 5 years or longer. C. Corporations must use the same depreciation method (e.g., straight line or accelerated) for stockholder reporting and tax purposes. D. Since depreciation is not a cash expense, it has no effect on cash flows and thus no effect on capital budgeting decisions. E. Under accelerated depreciation, higher depreciation charges occur in the early years, and this reduces the early cash flows and thus lowers a project's projected NPV.
As stated by the California high court in Greenman v. Yuba Power Products, where Greenman was injured when a tool his wife bought him malfunctioned, manufacturers should bear the costs of injuries their products cause and thus:
a. limited liability should be applied to manufacturers of defective products b. ultimate liability should be applied to manufacturers of defective products c. consumers should bear all the risk of using defective products d. manufacturers should bear some, but not all of the costs, of defective products e. none of the other choices are correct