f the interest rate is zero, _____________________________.

A. a present dollar is worth less than a future dollar.

B. annual compounding will give a larger terminal value than semiannual compounding.

C. PVIF=FVIF and PVIFA=FVIFA.

D. the present value of a perpetual annuity is zero.

Which statement regarding a typical corporate bond is incorrect?

A. A bond is a promissory note representing a long-term debt contract.

B. A bond is commonly referred to as a fixed-income security since its yield-to-maturity and coupons are fixed.

C. When a firm issues bonds it essentially borrows money from bond buyers.

D. When a firm raises money by selling bonds its leverage increases.