Liberty BUSI 320 Chapter 16 Reading Assignment Answers Complete Solutions
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Which of the following is a finance lease.
The three disadvantages of including debt in the capital structure are the obligations is fixed and must be paid, the ____ agreement may put restrictions on the firm, and debt can ____ (increase/depress) common stock values if utilized beyond a given point.
A company issuing bonds with a high rating can generally expect to compare to a company with a low rating.
If market interest rates rise above the coupon rate, the bond’s market price will be par value.
Which of the following are classified as outflows in a bond refunding decision?
The primary disadvantages to the investor of a zero-coupon is that the gradual ____in value is_____as ordinary income.
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Identify variables that must be present in order for a company to initiate a refunding operation?
Under which conditions would a company refinance its debt?
The yield to maturity can also be thought of as a bond’s ____.
A bond with a serial payment provision _____.
A lender is negotiating a mortgage and desires an after-acquired property clause. What can be expected to happen if the after-acquired property clause is not included in the final deal?
A subordinate debenture is___.
The ___value of the bond is paid on the ___ date
Bond retirement methods include the single lump-sum payment at maturity, serial ____, and by a ____ feature.
A company issuing bonds with high rating can generally expect to___compare to a company with a low rating.
When the economy is in recession the times-interest-earned ratio___.
A bond with a call provision allows a company to ___ a bond at a ____ to par in order to _____at a lower interest rate?
A sale-leaseback arrangement occurs when a company___an asset to receive a capital____, and then leases the asset from the ___ of the property.
If an investor is holding a junior mortgage, the investor will receive payment after all____obligations have been made.
The yield spread is ___ during recessions and ___ during normal economic times.
A bond has a par value of $1,100, and pays an $80 coupon. Similar bonds are yielding 6%. The coupon rate of the bond is ______.
A bond has a par value of $1000 is trading at $900, and pays a $90 coupon. Similar bonds are yielding 10%. The current yield of the bond is ___%?
A ______ debenture holder is paid just after the senior debenture holders have been paid
A Eurobond is
The four advantages of having debt in the capital structure are: the interest payments are tax_________, the financial obligation is ___________, inflation can lower the liability in real dollar terms, and the use of debt can reduce a company/s cost of capital
If a bond has a par value of $1000 and pays a 6% coupon, the current market value of the bond is ________ if similar bonds are yielding 8%
A lender is negotiating a mortgage and desires an after-acquired property clause. What can be expected to happen if the after-acquired property clause is not included in the final deal
The market value of a floating rate bond is often close to ______ value because the yield on the bond ________ with market yields
The return to a purchaser of a zero-coupon bond is the difference between the investor’s _____ and the ______ value of the bond
A bond with a serial payment provision has a maximum of four different maturity dates