(a) Identify whether each of the following factors implies a lower or higher price for a bond.

1. Low marketability of the security
2. Short term to maturity
3. Low credit rating of the issuer
4. No call provision

(b) Discuss some of the practical considerations that managers are concerned with when they choose a companys capital structure. State one significant difference between trade-off and pecking order theory of capital structure (hint: do not state definition)