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Author Question: In 2000 Jenson Inc issued bonds with an 8 percent coupon rate and a 1,000 face value. The bonds ... (Read 83 times)

lindiwe

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In 2000 Jenson Inc issued bonds with an 8 percent coupon rate and a 1,000 face value. The bonds
  mature on March 1, 2025.
 
  If an investor purchased one of these bonds on March 1, 2012, determine
  the yield to maturity if the investor paid 1,100 for the bond.
  A) The yield to maturity must be greater than 8 because the price paid for the bond exceeds the
  face value.
  B) 7
  C) The yield to maturity is 900 (1,000 interest less 100 capital loss).
  D) 5.4

Question 2

Using the dividend valuation method, an analyst determines the value of Company A's stock to be
  10 and the value of Company B's stock to be 14. Based on this information, which of the following
  statements is most accurate?
 
  A) Company B's required rate of return is higher than Company A's required return.
  B) Other things being equal, if Company A and Company B have the same firm value, Company
  A may have more shares of stock outstanding than Company B.
  C) Company B must be riskier than Company A, and risk requires a reward.
  D) Other things being equal, if Company A and Company B have the same firm value, Company
  B must have more debt, thus leveraging its returns for the benefit of shareholders.


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joneynes

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lindiwe

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Reply 2 on: Jul 10, 2018
Gracias!


carojassy25

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Reply 3 on: Yesterday
Wow, this really help

 

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