The dollar interest received divided by the market price of the bond is called t
ID: 2708763 • Letter: T
Question
The dollar interest received divided by the market price of the bond is called the
Answer
A par value.
B coupon rate.
C current yield.
D yield to maturity.
To the corporate investor, preferred stock offers which of the following advantages?
Answer
A. a slightly higher yield than debt.
B. 30% of preferred dividends are tax-exempt.
C. 70% of preferred dividends are tax-exempt.
D. a and b are correct.
Preferred stock is the least used of all long-term securities because
Answer
A. investors can get higher returns after taxes in other investments.
B. preferred dividends are considered regular (fixed) obligations but are not tax-deductible.
C. flotation costs are extremely high compared to bonds.
D. all of these.
Lucas, Inc. earned $15 million last year and retained $6 million. Lucas has 5 million shares outstanding, and the current price of Lucas shares is $30 per share. What is the payout ratio?
A.2.67%
B. 4%
C. 40%
D. 60%
Which of the following factors will not increase the value of a currency in foreign markets?
Answer
A. High interest rates
B. High inflation
C. Positive balance of payments
D. Strong stock market rally
The spot rate of the British pound to the dollar is 1.15 (??). The 180 day forward rate is $1.17, the annualized forward premium is:
Answer
A. 1.018%
B. 3.571%
C. 7.273%
D. 3.478%
A par value.
B coupon rate.
C current yield.
D yield to maturity.
Explanation / Answer
B
D
D
C
B
A
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