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2. If a bond price is $1070 and pays 6% annual coupon for 20 years. What is the yield maturity (discount rate) of the bond?
2. If a bond price is $1070 and pays 6% annual coupon for 20 years. What is the yield maturity (discount rate) of the bond? ( You dont have to calculate, you can answer this question using the idea from 4 key relationship)
A. 6.40%
B. 5.42%
C. 8.90%
D. 7.52%
3. Which of the following parties receive the residual claim when bankruptcy does occur?
A. Perferred stockholders
B. Common stockholders
C. banks
D. debt holders
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