1- A Johnson corporation bond is currently selling for $850. The bond matures in 20 years, has a face value of $1,000, and a yield to maturity of 10.55%. The bond's coupon rate is: a. 8.72%. b. 13%. c. 11%. d. 12%

2- As interest rates, and consequently investors' required rates of return, change over time the ________ of outstanding bonds will change as a result. a. coupon interest payment b. price c. par value d. maturity date

3- Minority shareholders have a greater chance of electing a member to the board of directors if the company uses? a. cumulative voting. b. minority voting. c. majority voting. d. proxy voting.

4- Southland Tours has net income of $2 million this year. The book value of Southland Tours common equity is $8 million dollars. The company's dividend payout ratio is 60% and is expected to remain this way. What is Southland Tours' internal growth rate? a. 10% b. 9% c. 15% d. 6%

5- What is the expected rate of return on a bond that matures in 5 years, has a par value of $1,000, a coupon rate of 11.5%, and is currently selling for $982? Assume annual coupon payments. a. 12.5% b. 12.7% c. 12.0% d. 13.4%

6- Which of the following statements concerning bonds and risk is true? a. Because the interest payments and maturing value are known, the only risk associated with investing in bonds is default risk. b. Zero coupon bonds are always more risky than bonds with high coupon rates because of the time value of money. c. Bonds are generally less risky than common stock because of the preference for debt over equity in the event of bankruptcy and liquidation. d. B-rated bonds are above average for risk, i.e., less risky than the average bond.

7- Which of the following statements concerning junk bonds is MOST correct? a. Junk bonds may also be called low-yielding securities. b. A rational investor will always prefer a AAA-rated bond to a junk bond. c. Junk bonds have higher interest rates than AAA-rated bonds because of the higher risk. d. Junk bonds are priced higher than AAA-rated bonds because junk bonds are more risky.