Bond A has a current yield of 6 and Bond B has a current yield of 8. If the market price of both
bonds is the same, then the yield to maturity on Bond B must be higher than the yield to maturity
on Bond A.
Indicate whether the statement is true or false
Question 2
Incremental cash flows refer to
A) the new cash flows that will be generated if a project is undertaken.
B) the cash flows that are foregone if a firm does not undertake a project.
C) the cash flows of a project, minus financing costs.
D) the difference between after-tax cash flows and before-tax accounting profits.
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