Question
Bond ratings are designed to reflect the probability of a bond issue going into default. Which rating below reflects the MOST RISK ? CCC BB
Bond ratings are designed to reflect the probability of a bond issue going into default. Which rating below reflects the MOST RISK?
CCC
BB
C
AA
AAA
Financial Statements: Which of the following statements is TRUE?
Balance sheet provides a snapshot of a firms financial position at one point in time
Income statement summarizes a firms revenues and expenses over a given period of time
Statement of Cash Flows reports impact of a firms cash flows over a given period of time
A, B, and C are all TRUE.
A, B, and C are all FALSE.
Which of the following is NOT one of the ways to calculate Cost of Common Equity, r s, for Weighted Average Cost of Capital (WACC)?
CAPM: r s = r R F + (r M r R F )b
DCF: r s = (D 1 P 0 ) + g
Bond Yield Plus Risk-Premium: r s = r d + RP
IRR: YTM less (CAPM + DCF)
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