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QUESTION 46 USE the FINRA website to answer questions about the corporate bond with the following CUSIP number 88160RACS. If Tesla is downgraded by Moody's the yield on this bond will not change. O True O False QUESTION 47 Entrepreneurs will never agree to offer information regarding the operations of the business to investors for fear of damaging their ability to raise further rounds of finance. O True O False QUESTION 48 UBER's management considers TESLA a competitor. O True False
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- 4. Why would the company redeem the bonds prior to the maturity date if they weregoing to recognize a loss? Can you think of an example of such a decision we might facein our personal lives?5. The 10-year German and Japanese government bonds have recently traded at anegative yield (market rate of interest)! Why would an investor purchase a bond that,in effect, pays a negative interest rate?!Questions How would Uber’s balance sheet be impacted by the $2 billion bond issuance on the date of issuance? How much in cash interest would Uber pay on this bond issuance in 2019? If Uber is not profitable, why do you think creditors would be willing to purchase Uber’s bonds?duction to Finance (1) K Question 4 of 34 > a. The price she would be willing to pay for the bond is $. (Round to the nearest cent.) b. The Bank of America bond is not an acceptable investment if she pays (Select from the drop-down menus.) Nicholas Pelliccio... This test: 34 point(s) possible This question: 1 point(s) possible (Bond valuation) Bank of America has bonds that pay a coupon interest rate of 10 percent and mature in 25 years. If an investor has a required rate of return of 4.6 percent, what should she be willing to pay for the bond? What happe if she pays more or less? 11/02/23 9:00 AM for the bond because the expected rate of return for the bond is Submit test than her required rate of return. Next
- Moving to another question will save this response. Quèstion 3 For each of the following definition select the correct term Definition Term A time draft payable to a seller of goods, with payment guaranteed by a bank Give bond holders the opportunity to purchase common stock at a prespecified price Government-issued foreign currency-denominated debt Option that can be exercised at any time before (and on) the expiration date Hybrid security that has characteristics of both bonds and common stock The risk that depositors will demand more cash than banks can immediately provideQ : Discuss different types and characteristics of debt instruments with specific reference of Bonds . Due to covid19 the equity market exhibits down and move and hence he considers it a risky investment. down so he considers it is quite risky.Mr .Sikander looking to have stable income. Mr.sikander is a retired person and just received Amount 40,000,000 on account of different funds. He is looking to buy Bonds .Mr .Saleem a friend of Sikander suggested him to buy MCB bonds .The bond has 25 years' life and was issued 13 years ago.It pays 11.5 percent coupon rate with face value PKR 1050. Mr. Ahmed wants to make 14% profit from his investments. a) Should Mr.sikander buy MCB bond if it is currently selling at 930? b) How many bonds can he buy if the bond is selling at calculated price? c) Write features of Zero-coupon bond and why do investors buy it when they offer nothing periodically?46. One of the points below is the most accurate?a. After a company files for bankruptcy, the administrator liquidates it, using the money to compensate bondholders, overdue salaries, royalties, and legal fees.b. Where the price of the bond approaches the sinking fund call price, a company with a sinking fund payout due will typically opt to purchase back bonds on the open market.c. Income bonds incur dividends only after the amount of interest received by the corporation is directly earned. As a result, these securities cannot default a corporation, making them better for investors than traditional bonds.d. One drawback to zero coupon bonds being that the tax gains from selling securities are not realised before the bonds maturity.e. Callable bonds should have a lower yield to maturity than noncallable bonds, assuming all other factors remain stable.
- Question 2: What Would Your Finance Manager Say?Ike Intern stated, “Our firm should always issue bonds when the market rate of interest is greater than the stated rate of interest. By doing so, we would make lower periodic cash payments for interest.” Irene Intern countered, “You’re wrong. We should issue bonds only when the market rate of interest is less than the stated rate of interest. If we did, we could sell bonds at a premium and receive more cash.” What would Ike and Irene’s Finance Manager say? Question 3: Theory Vs. PracticeAs discussed in the chapter, preferred stock offers an investor certain preferences over common stock in relation to dividends and liquidation value. In theory, these preferences should make preferred shares more attractive to potential investors than common stock. In practice, however, a majority of companies do not issue preferred stock, and most investors seem to favor putting their investment dollars into common shares. Discuss some of the reasons a…K (Related to Checkpoint 5.6) (Solving for i) Springfield Learning sold zero coupon bonds (bonds that don't pay any interest, instead the bondholder gets just one payment, coming when the bond matures, from the issuer) and received $1,200 for each bond that will pay $19,000 when it matures in 35 years. a. At what rate is Springfield Learning borrowing the money from investors? b. if Nancy Muntz purchased a bond at the offering for $1,200 and sold it 10 years later for the market price of $3,400, what annual rate of return did she earn? c. If Barney Gumble purchased Muntz's bond at the market price ($3,400) and held it 25 years until maturity, what annual rate of return would he have earned? a. At what rate is Springfield Learning borrowing the money from investors? % (Round to two decimal places.)Which of the following is FALSE regarding bonds? The yield to maturity is the return an investor would earn if she buys the bond at the current price and holds it to maturity, collecting all of the promised coupon payments and the par value at maturity bond holders vote to elect members to the board of directors a bond indenture includes all of the basic terms of a bond issue bondholders have legal recourse if a company fails to make the promised interest payments or the par value at maturity corporate bonds usually have a fixed coupon rate with semi-annual interest payments.
- Your uncle would like to limit his maturity risk and his default risk, but he would still like to invest in corporate bonds. Which of the possible bonds listed below best satisfies your uncle's criteria? OA. 30 year U.S.. Government Treasury Bond B. BBB bond with 10 years to maturity. OC. AAA bond with 20 years to maturity. D. AAA bond with 10 years to maturity.A Moving to another question wil Save this response Question 10 Corporate bonds that have a rating from credt tating agencies such a Standard and Podrs Mody and Ritch are normaly placed at Seids. highen lower lowen lower higher higher none of the aboveTheory: No investor would willingly hold a bond (which carries some risk) that pays a negative nominal interest rate when he/she could carry cash with the zero nominal interest rate. FRED Severnment Bond d10yMan uing nmarkfor Germany venment Bond eid 10yMannduding Bendmar for pan Long Tem Gevementond e 10yr Man udingendmarfor france uding Bendmarkfor Sweden mentnd 10y 84 42 my 44 2021 and Development Empirical Evidence: The chart above shows the nominal interest rate on 10-year govemment bonds for Germany, Japan, France, and Sweden, respectively, from 2015 to the present. We observe that nominal interest rate on 10-year government bond has been negative at least once for each country during this interval. Why does theory disagree with the evidence? Explain.