t) Horizon Communications stock pays a fixed annual dividend of $3.00. Because of lower inflation, the markets 14, required yield on this preferred stock has gone from 12% to 10%. As a result A) the value of Horizon's preferred increased by $3.00. B) the value of Horizon's preferred increased by $5.00 C) the value of Horizon's preferred decreased by $5.00 D) Horizon's dividend decreased by 6 cents. 15) The discount rate used to value a bond is A) the market rate of interest. B) the coupon interest rate. C) fixed for the life of the bond. D) determined by the issuing company. 16) As interest rates, and consequently investors' required rates of return, change over time, the outstanding bonds will also change. of A) price B) par value C) maturity date D) coupon interest payment 17) A bond that is held to maturity A) will necessarily have a yield to maturity equal to the coupon rate. B) will earn the yield to maturity at the date of maturity C) will necessarily earn the yield to maturity at the time of purchase. D) may earn more or less that its yield to maturity at the time of purchase because the rate at which coupons can be reinvested may change. 18) If the market price of a bond increases, then A) the yield to maturity increases. B) the coupon rate increases. C) the yield to maturity decreases. D) none of the above. 19) Cassel Corp. bonds pay an annual coupon rate of 10%. If investors' required rate of return is now 8% on these bonds, they will be pricedat A) a discount to par value. B) a premium to par value. C) par value. D) cannot be determined from information given. 20) A decrease in the will cause an increase in common stock value. A) growth rate B) required rate of return C) last paid dividend D) both B and C