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Zero coupon bonds sell at a discount to their face value…

Assignment Help Finance Zero coupon bonds sell at a discount to their face value…

Finance

Zero coupon bonds sell at a discount to their face value…

Zero coupon bonds sell at a discount to their face value… Show more Question 1 2 points 2 points 2 points 2 points 2 points Save Zero coupon bonds sell at a discount to their face value prior to their maturity. Zero coupon bonds sell at a discount to their face value prior to their maturity. True False True False Question 2 2 points 2 points 2 points 2 points 2 points Save The present value of a single future sum of money is inversely related to both the number of years until payment is received and the discount rate. The present value of a single future sum of money is inversely related to both the number of years until payment is received and the discount rate. True False True False Question 3 2 points 2 points 2 points 2 points 2 points Save The security market line reflects an individual investor’s attitude toward risk. The security market line reflects an individual investor’s attitude toward risk. True False True False Question 4 2 points 2 points 2 points 2 points 2 points Save The formula for compound future value is: The formula for compound future value is: FVn = PV(1+i) n FVn = (1+i)/PV FVn = PV/(1+i) n FVn = PV(1+i) -n FVn = PV(1+i) n FVn = (1+i)/PV FVn = PV/(1+i) n FVn = PV(1+i) -n Question 5 2 points 2 points 2 points 2 points 2 points Save iSaga, whose common stock is currently selling for $12 per share, is expected to pay a $1.80 dividend, and sell for $14.40 one year from now. What are the dividend yield, growth rate, and total rate of return, respectively? iSaga, whose common stock is currently selling for $12 per share, is expected to pay a $1.80 dividend, and sell for $14.40 one year from now. What are the dividend yield, growth rate, and total rate of return, respectively? 15% 20% 35% 10% 5% 15% 15% 12% 27% 20% 15% 35% 15% 20% 35% 10% 5% 15% 15% 12% 27% 20% 15% 35% Question 6 2 points 2 points 2 points 2 points 2 points Save A security with a beta of one has a required rate of return equal to the overall market rate of return. A security with a beta of one has a required rate of return equal to the overall market rate of return. True False True False Question 7 2 points 2 points 2 points 2 points 2 points Save Unlike market value, the intrinsic value of an asset is estimated independently of risk. Unlike market value, the intrinsic value of an asset is estimated independently of risk. True False True False Question 8 2 points 2 points 2 points 2 points 2 points Save Preferred stock is similar to a bond in the following way: Preferred stock is similar to a bond in the following way: preferred stock always contains a maturity date both investments provide a stated income stream both contain a growth factor similar to common stock both provide interest payments preferred stock always contains a maturity date both investments provide a stated income stream both contain a growth factor similar to common stock both provide interest payments Question 9 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 10 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% • Show less

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