# Which Of The Following Is Generally Not A Characteristic Of A Bond

2. A(n)____ is used to outline the issuing company’s contractual obligations to bondholders. a. indenture b. bond rating c. mortgage d. debenture3. Which of the following is generally not a characteristic of a bond?a. indenture b. par value c. voting rights d. claims on assets and income8. Sterling Corp. $1,000 par value bonds pay 10% annual interest and are selling at 970. The current market rate of interest is: 9. The interest on corporate bonds is typically paid: a. quarterly b. annually c. semiannually d. monthly10. Mi has a $1,000 par value, 30-year bond outstanding that was issued 10 years ago at an annual coupon rate of 10%, paid semiannually. Market interest rates on similar bonds are 7%. Calculate the bond’s price. 11. What is value of a bond that matures in six years, has an annual coupon payment of $110 and a par value of $1,000? Assume a required rate of return of 11%, and round your answer to the nearest $1. 12. What is the expected rate of return on a bond that matures in seven years, has a par value of $1,000, an annual coupon rate of 8%, and is currently selling for $911?Question 13Davis & Davis ussued $1,000 par value bonds for $1035. The bonds pay 9% interest annually and mature in 20 years. The market rate of interest is: Question 14Which of the following statement is false?- Preferred stock is similar to bonds in that the dividend of a preferred stock is fixed much like the interest payment on a bond is fixed. – Preferred stock, like common stock, usually has no maturity i. e. , the corporation does not pay back the investment. – The market value of preferred stock, like bonds, will usually fluctuate in value primary as the result of market rates of interest. – Preferred dividend payments are a tax-deductible expenditure. – Preferred stockholders are entitled to dividends before common stockholders can receive dividendsQuestion 15A decrease in the ________ will cause an increase in common stock value. a. last paid dividend b. require rate of return c. growth rate d. both the growth rate and the required rate of returnQuestion 16Preferred stock valuation usually treats the preferred stock as a: a. long term bond b. common stock c. capital asset d. perpetuity17. Green Company’s common stock is currently selling at $24 per share. The company recently paid dividends of $2. 20 per share and projects growth at a rate of 4%. At this rate, what is the stock’s expected rate of return?18. You are evaluating the purchase of Holdings, Inc. common stock that just paid a dividend of $1. 80. You plan to hold the stock for 3 years and then sell it. You expect the price of the company’s stock to rise to $55. 10 at the end of your 3 year holding period. You estimate that a require rate of returned of 17. 5% will be adequate compensation for this investment. Calculate the present value of the expected future stock price. Round to the nearest $0. 25. 19. Little Feet Shoe Co. (LFS) just paid a dividend of $1. 50 on its common stock. This company’s dividends are expected to grow at a constant rate of 4% indefinitely. If the required rate of return of this stock is 11%, compute the current value of per share of LFS stock. 20. Sacramento Light and Power issued preferred stock in 1998 that has a par value of $70. The preferred stock pays a dividend of 5. 5%. Investors require rate of return of 6. 0% today on this stock. What is the value of the preferred stock today?21. UVP preferred stock pays a $1. 00 quarterly dividend. If your annual required rate of return is 9%, how much will you be willing to pay for a share?22. Cashman’s Collection service paid a $1. 20 per share annual dividend on its common shares yesterday. Business has been very good for the firm lately and so, it anticipates a 10% growth in dividends for the next 3 years. After that time, it expects dividends to grow at an annual rate of 6% thereafter. If Cashman’s cost of common equity capital is 8%, then what should be the market price for its common shares currently be? Round your answer to the nearest dollar. 23. You are evaluating the purchase of Cool Toys Inc. common stock that just paid a dividend of $1. 80. You expect the dividend to grow at a rate of 8%, indefinitely. You estimate the required rate of return of 17% will be adequate compensation for this investment. Assuming that your analyst is correct, what is the most that you would be willing to approximately pay for the common stock if you were to purchase it today?24. A stock currently sells for $42 per share, & the required rate of return on the stock is 10%. Assume a growth rate of 5%, calculate the stock’s last dividend paid. 25. Jon is contemplating the purchase of common stock @ start of the year & to hold the stock for 1 year. He expects the year-end dividend to be $3. 50 & expects a year-end price for the stock of $48. If his required rate of return is 12%, then the value of the stock is: