If a bondholder is concerned about the risk that the issuer of the bond will not make payments, what kind of risk are they concerned about? " Multiple Choice Inflation risk Liquidity risk Interest rate risk Taxability risk Default risk Which of the following types of debt is most risky, based on the available selections? Multiple Choice points (8 01:01:52 A bond with a sinking fund provision A subordinated debenture A senior bond o o A zero-coupon Treasury bill The term structure of interest rates: Multiple Choice points (8 0101:39 0 Graphs the coupon rate, current yield, and yield to maturity of a bond. 0 Graphs the level of coupons by maturity and is also called a yield curve. 0 Graphs the level of corporate bond rates based on default risk premiums and Graphs the level of interest rates by maturity and is usually upward-sloping Which of the following credit ratings is the highest rating a junk, or speculative, bond can have before it is classified as an investment-grade bond? RED Save En Calvin and Andre both have bonds they bought at par value and pay 7% coupons. Calvin's bond has ten years to maturity and Andre's bond has 20 years to maturity If interest rates suddenly rise to 9%, what is the approximate change in value of Calvin's bond? 14.95% -18. 40% 13.01% Which of the following is an example of a covenant? Multiple Choice 0 Management is required by a legal document to keep a certain level of cash 0 Management offers unsecured debt 0 The company misses a payment on a bord 0 Management provides the bondholders with information about the amount of debt being offered and other features of the debt offering Which of the following best describes the difference between payments made to bondholders and payments made to stockholders? Payments to both stockholders and bondholders are taxed twice 0 Payments to bondholders are taxed twice Payments to stockholders are taxed twice Neither payments to bondholders nor payments to stockholders are taxed twice A company just paid a dividend of $3.00. They expect the growth rate of their dividends for the next three years will be 10% for dividends of $3.30, 53.63, and $3.993 respectively. They also expect the price of their stock, based on a reduced growth rate of 5to be $46 585 the end of the third year. What is the price of the stock today if the required rate of return is 1497 $75.00