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Can you answer questions 1-5 please? 1) A Johnson & Johnson bond pays an 8% coupon rate on a bond provided that its earnings exceed
Can you answer questions 1-5 please?
1) A Johnson \& Johnson bond pays an 8% coupon rate on a bond provided that its earnings exceed an ROE of 8%. What type of security is this? A. Perpetual bond; B. Equity; C. Dividend; or D. Income bond. 2) Which security has the greatest preference in liquidation? A. Equity; B. Preferred shares; C. Subordinated debt; or D. Senior debt. 3) Which security has a "residual claim" on a company's cash flows? A. Equity; B. Preferred shares; C. Subordinated debt; or D. Senior debt. 4) Which two cash flows are received by a typical bond? A. Dividends and interest; B. Share sale and principal at maturity; C. Dividends and share sale; or D. Interest and principal at maturity. 5) Which best explains a fixed coupon bond? A. Sukuk; B. Fixed coupon paid until maturity, and lump sum returned at maturity; C. Fixed coupon paying bond with no maturity; or D. A debt security which promises one payment in the futureStep by Step Solution
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