FIN 315 test 3

Callable

A bond that can be paid off early at the issuer's discretion is referred to as being which type of bond ?

Maturity

A bond's principle is repaid on the _____ date.

Face Value

A discount bond's coupon rate is equal to the annual interest divided by the:

a discount, less than

All else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity.

Coupon

Allison just received the semiannual payment of $35 on a bond she owns. Which term refers to this payment ?

Increase at a decreasing rate

As a bond's time to maturity increases, the bond's sensitivity to interest rate risk:

voting by proxy

Authorizing another shareholder to vote on your behalf

Face Value

Bert owns a bond that will pay him $45 each year in interest plus $1000 as a principle payment at maturity. What is the $1000 called?

Debenture (unsecured, no specific pledge of property)

Jason's Paints just issued a 20-year, 7.25 %, unsecured bonds at par. These bonds fit the definition of which one of the following terms?

Is unsustainable over the long term

Supernormal growth is a growth rate that:

Market Price

The current yield is defined as the annual interest on a bond divided by the:

Requires the growth rate to be less than the required return

The dividend growth model:

g1 can be greater than R

When using the 2-stage dividend growth model:

Stocks can have negative growth rates.

Which one of the following statements is correct?

Yield to Maturity < Coupon Rate

Which one of these equations applies to a bond that currently has a market price that exceed par value?

Nasdaq market makers

Who can access level 3 of NASDAQ's information?

g

___ represents the capital gains yield as used in the dividend growth model.

discount rate

a decrease in ______ will increase the current value of a stock according to the dividend growth model.