Describe corporate bonds. What affects the interest rate paid by ...

[Sufayan.ah]

Describe corporate bonds. What affects the interest rate paid by a corporation?

Question 2

The logical outcome of the assumptions underlying Theory X is a highly controlled work situation in which managers make all decisions and workers carry them out.
 
 Indicate whether the statement is true or false

[kjo;oj]

Answer to Question 1

A corporate bond is a corporation's written pledge that it will repay a specified amount of money with interest. The interest rate is affected by the financial health of the company issuing the bonds. Specific factors that affect the interest rate are the corporation's ability to pay interest each year until maturity and the ability to repay the bond at maturity. For bond investors, the interest rate on corporate bonds is an example of the risk-return ratio discussed earlier in this chapter. Simply put, investors expect more interest if there is more risk with more speculative bond issues. The maturity date is the date on which the corporation will repay the borrowed money. For most corporate bonds, maturity dates range from 10 to 30 years.

Answer to Question 2

True

[Sufayan.ah]

Excellent

[nanny]

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