Which of the following bonds will be most sensitive to a change in interest rates?,Question 1 options:, A) a ten-year bond with a $2000 face value whose yield to maturity is 5.8% and coupon rate is 5.8% APR paid semiannually, B) a 15-year bond with a $5000 face value whose yield to maturity is 7.4% and coupon rate is 6.2% APR paid annually, C) a 20-year bond with a $3000 face value whose yield to maturity is 6.0% and coupon rate is 5.4% APR paid semiannually, D) a 30-year bond with a $1000 face value whose yield to maturity is 5.5% and coupon rate is 6.4% APR paid annually,,Question 2 (2 points) ,A $1000 bond with a coupon rate of 5.4% paid semiannually has five years to maturity and a yield to maturity of 7.5%. If interest rates rise and the yield to maturity increases to 7.8%, what will happen to the price of the bond?,Question 2 options:, A) fall by $9.82, B) fall by $11.59, C) rise by $12.16, D) The price of the bond will not change.,,Question 3 (2 points) ,A company issues a ten-year bond at par with a coupon rate of 6% paid semi-annually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 7.8%. What was the percentage change in the price of the bond over the past two years?,Question 3 options:, A) 11.81%, B) -43.04%, C) -10.56%, D) 75.55%,,Question 4 (2 points) ,What is the coupon rate of a two-year, $10,000 bond with semiannual coupons and a price of $9543.45, if it has a yield to maturity of 6.8%?,Question 4 options:, A) 4.32%, B) 5.60%, C) 6.25%, D) 8.44%,,Question 5 (2 points) ,A corporate bond which receives a BBB rating from Standard and Poor’s is considered,Question 5 options:, A) a junk bond., B) an investment grade bond., C) a defaulted bond., D) a high-yield bond.,,Question 6 (2 points) ,Spacefood Products will pay a dividend of $2.40 per share this year. It is expected that this dividend will grow by 3% per year each year in the future. What will be the current value of a single share of Spacefood’s stock if the firm’s equity cost of capital is 10%?,Question 6 options:, A) $24.00, B) $23.97, C) $30.22, D) $34.29,,Question 7 (2 points) ,Valence Electronics has 217 million shares outstanding. It expects earnings at the end of the year of $760 million. Valence pays out 40% of its earnings in total?15% paid out as dividends and 25% used to repurchase shares. If Valence’s earnings are expected to grow by 6% per year, these payout rates do not change, and Valence’s equity cost of capital is 8%, what is Valence’s share price?,Question 7 options:, A) $10.51, B) $24.40, C) $56.60, D) $70.05,,Question 8 (2 points) ,JRN Enterprises just announced that it plans to cut its dividend from $2.50 to $1.50 per share and use the extra funds to expand its operations. Prior to this announcement, JRN’s dividends were expected to grow at 4% per year and JRN’s stock was trading at $25.00 per share. With the new expansion, JRN’s dividends are expected to grow at 8% per year indefinitely. Assuming that JRN’s risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to:,Question 8 options:, A) $25.00, B) $15.00, C) $31.25, D) $27.50,,Question 9 (2 points) ,Jumbuck Exploration has a current stock price of $2.00 and is expected to sell for $2.10 in one year’s time, immediately after it pays a dividend of $0.26. Which of the following is closest to Jumbuck Exploration’s equity cost of capital?,Question 9 options:, A) 9%, B) 12%, C) 18%, D) 22%,,Question 10 (2 points) ,Which of the following is NOT a method by which a company can increase its dividend payments?,Question 10 options:, A) It can issue more shares., B) It can increase its earnings., C) It can decrease the number of shares outstanding., D) It can increase its dividend payout rate.
Regent Papers is a library of common essays on high school, college, undergraduate and postgraduate topics. We have collected top papers from various institution, students and professors. The papers are based on common essay topics in all subjects.
2922 Oak Grove Drive La Cañada Flintridge, CA 91521.
+2 54723059803 (text only-sms)