A bond has a market price that equals its par (or face) value. Which of the following features currently apply/applies to this bond? I. sells at par value II. sells at premium price III. sells at discounted price IV. yield-to-maturity that exceeds the coupon rate V. yield-to-maturity that is less than the coupon rate

Your company has promised to give you a $100,000-gift on your wedding day in five years. What happens to the present value of this gift if you re-schedule your wedding day to two years from now?

becomes negative

decreases

cannot be determined from the information provided

remains constant

increases

The dividend growth model: I. can be used to value zero-growth stocks. II. can be used to compute a stock's price at any point in time. III. requires the growth rate to be equal to the required return. IV. assumes that dividends increase by a constant amount for the first 5 years and then no growth thereafter.

Which of the following statements related to annuities and perpetuities is/are correct? I. Most loans are a form of a perpetuity. II. Perpetuities are finite but annuities are not. III. We can calculate the present value of a perpetuity but not the future value. IV. An ordinary annuity is worth more than an annuity due given equal annual cash flows for five years at 10 percent interest, compounded annually. V. A perpetuity comprised of $500 monthly payments is worth less than an ten year annuity comprised of $500 monthly payments, given an interest rate of 12 percent, compounded monthly.

I, II, III and IV only

IV and V only

I, II, IV and V only

III only

II and III only

A decrease in ____________ will result in a decrease in the current value of a stock according to the dividend growth model?

I. discount rate II. dividend amount III. time to maturity

I and II only

II only

I, II and III

I only

I and III only

II only

I only

I, II, III and IV

III and IV only

I and II only