Question
Which of the following statement is FALSE? A. If a bond sells at a premium, it implies that the current yield is greater than the
Which of the following statement is FALSE?
A. | If a bond sells at a premium, it implies that the current yield is greater than the coupon rate. | |
B. | If coupon rate is lower than its yield to maturity, then the bond would sell at a discount. | |
C. | Dividend valuation with a constant growth model is similar to a growing perpetuity problem. | |
D. | The faster you pay off of mortgage, the more you save on interest; this is one of the advantages of paying off a loan earlier. | |
E. | Yield to maturity reflects the current market rate and it is the appropriate discount rate that matches the present value of the bond's cash flow stream and price of a bond. |
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