7. Which of these statements answers why bonds are known as fived income securie

Question

7. Which of these statements answers why bonds are known as fived income securies? A Investors on fixed incomes buy them D. All of these s will net receive their fixed principal when the bone matures at a fued date Calculate the price of an 8% coupon bond interest payments are semiannual with 6 years left to maturity and a YTM,(Amme and par value is $1,000.) A. $1.1122.55 B. $1,1142.72 C. $1,272.69 D. None of the above which of the following determines the dollar amount of interest paid to bondholders? 9. A. Original issue discount B. Call premium C. Coupon rate D. Market rate 10. Which of following is true: A. NPV-0 when WACC = IRR B. IRR 0 when NPV WACO C. wACC-0 when IRR-NPV D. None of the above 11. As of today, AMZN's WACC 10.6% and AAPL's wACC-9.8%. Both AMZN(Amazon) and AAPL (Apple) are publicly traded companies. This means A. AMZN's stock is more expensive than AAPL's stock. B. The coupon on a bond AAPL issues today would be 9.8%. C. AMZN is expected to grow faster than AAPL D. The market expects a higher return on investment from AMZN than AAPL 12. An NPV of $100K means: A. The project has $100K in revenue. B. The project has $100K in profit C. The project is expected to have $100K in revenue D. The project is expected to have $100K in proft

Explanation / Answer

7. Bonds will pay Periodic Interest payments to the Investors. Interest is calculated on the face value of shares by applying Coupon rate. They will get the same interest every time. Therefore ond are called Fixed Income Securities.

Answer B

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