Question
1.Bond X has 5 years maturity while bond Y has 20 years maturity. Both bonds have the same coupon rate and there are no other
1.Bond X has 5 years maturity while bond Y has 20 years maturity. Both bonds have the same coupon rate and there are no other differences between them. Which bond, X or Y, will have a bigger change in its price when there is a change in the market interest rates?
A) It depends whether the market interest rates go up or down.
B)Y
C)X
D) X and Y should have the same change in price.
2. According to the dividend discount model, the current stock price of a company is:
A)constant over time.
B)the sum of the present values of all future dividends.
C)zero for a zero-growth stock.
D)the future value of all future dividends.
3.Snapchat recently completed an initial public offering of common stock that each share owned by co-founder of the company carries _______ voting right(s).
a)20
B)10
C)0
D)1
4. Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds?
A)An increase in the market interest rates.
B)A reduction in market interest rates.
C)The company is changing its president.
D) There is no change in the market interest rates.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started