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International Cruise Lines sold an issue of 15-year $1,0…

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International Cruise Lines sold an issue of 15-year $1,0…

International Cruise Lines sold an issue of 15-year $1,0… Show more Question 8 2 points 2 points 2 points 2 points 2 points Save International Cruise Lines sold an issue of 15-year $1,000 par bonds to build new ships. The bonds pay 6.85% interest, semi-annually. Today’s required rate of return is 8.35%. How much should these bonds sell for today? Round off to the nearest $1. International Cruise Lines sold an issue of 15-year $1,000 par bonds to build new ships. The bonds pay 6.85% interest, semi-annually. Today’s required rate of return is 8.35%. How much should these bonds sell for today? Round off to the nearest $1. $1,065 $873 $936 $918 $1,065 $873 $936 $918 Question 9 2 points 2 points 2 points 2 points 2 points Save All other things being equal, the future value of an investment will increase if: All other things being equal, the future value of an investment will increase if: the investment compounds more often during each year the investment is compounded for more years the investment is compounded at a higher interest rate all of the above the investment compounds more often during each year the investment is compounded for more years the investment is compounded at a higher interest rate all of the above Question 10 2 points 2 points 2 points 2 points 2 points Save Yanti Corp. preferred stock has a 5% stated dividend percentage, and a $100 par value. What is the value of the stock if your required rate of return is 6% per year? Yanti Corp. preferred stock has a 5% stated dividend percentage, and a $100 par value. What is the value of the stock if your required rate of return is 6% per year? $83.33 $100 $120 $3,000 $83.33 $100 $120 $3,000 Question 11 2 points 2 points 2 points 2 points 2 points Save Which of the following statements is true? Which of the following statements is true? Short-term bonds have greater interest rate risk than do long-term bonds. Long-term bonds have greater interest rate risk than do short-term bonds. All bonds have equal interest rate risk. None of the above. Short-term bonds have greater interest rate risk than do long-term bonds. Long-term bonds have greater interest rate risk than do short-term bonds. All bonds have equal interest rate risk. None of the above. Question 12 2 points 2 points 2 points 2 points 2 points Save The present value of an annuity due is less than the present value of an otherwise identical ordinary annuity. The present value of an annuity due is less than the present value of an otherwise identical ordinary annuity. True False True False Question 13 2 points 2 points 2 points 2 points 2 points Save If you put $900 in a savings account that yields 10% compounded semiannually, how much money will you have in the account in three years (round to nearest dollar)? If you put $900 in a savings account that yields 10% compounded semiannually, how much money will you have in the account in three years (round to nearest dollar)? $1,340 $1,170 $1,227 $1,206 $1,340 $1,170 $1,227 $1,206 Question 14 2 points 2 points 2 points 2 points 2 points Save A firm can increase the growth rate of common stockholders’ investment in the firm by retaining more earnings or increasing return on equity. A firm can increase the growth rate of common stockholders’ investment in the firm by retaining more earnings or increasing return on equity. True False True False Question 15 2 points 2 points 2 points 2 points 2 points Save A call provision allows the issuing firm the opportunity to avoid rising interest rates by calling investors and asking for more cash. A call provision allows the issuing firm the opportunity to avoid rising interest rates by calling investors and asking for more cash. True False True False Question 16 2 points 2 points 2 points 2 points 2 points Save To compound $100 quarterly for 20 years at 8%, we must use: To compound $100 quarterly for 20 years at 8%, we must use: 40 periods at 4% 5 periods at 12% 10 periods at 4% 80 periods at 2% 40 periods at 4% 5 periods at 12% 10 periods at 4% 80 periods at 2% Question 17 2 points 2 points 2 points 2 points 2 points Save In the case of insolvency, the claims of debt are honored prior to those of common stock and after those of preferred stock. In the case of insolvency, the claims of debt are honored prior to those of common stock and after those of preferred stock. True False True False • Show less

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