19. Which of the following factors is NOT included in the calcula US Treasury Bo

Question

19. Which of the following factors is NOT included in the calcula US Treasury Bond? of return of a long-term A) a real risk-free interest rate B) a maturity premium C) a default-risk premium D) an inflation-risk premium 20. Given the following financial I statements for ACME Corporation, what amount did the fo company pay in dividends for 20102 Income Statement Year Ended 12/31/10 12/31/2010 12/31/2009 $45,000 Balance Sheet Sales Cost of Goods Sold $1,300,000 750,000 Current Assets $50,000 880,000 50,000 Gross Fixed Assets Less Accumulatec 350,000 Operating Expenses200,000 Depreciation Depreciation 450,000 350,000 100,000 Fixed Assets430,000 ense $395,000 $50,000 5,000 Total Assets $480,00 EBIT Interest Expense EBT Taxes Net Income 250,00 50,000 200,000 Current Liabilities $35,000 5,00 110,00 0,000 g-term Debt 330,000 270,000 $120,000 Common Stoc 70,000 etained Earnings Total Liabilities & $480,000 $395,000 Equity A) $45,000 B) $25,000 C) $100,000 D) $80,000

Explanation / Answer

19)

US Treasury bonds are guaranteed by the federal government. So there will no risk of default. Default risk premium is to premium for default risk undertaken.

Hence, correct option is (C).

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