hw 2/3

The bond market requires a return of 6.2 percent on the 15

year bonds issued by Mingwei Manufacturing. The 6.2 percent is referred to as the: - Yield to maturity

Which one of the following compounding periods will yield the lowest effective annual rate given a stated future value at Year 5 and an annual percentage rate of 10 percent?

Annual

Today, June 15, you want to buy a bond with a quoted price of 98.64. The bond pays interest on January 1 and July 1. Which one of the following prices represents your total cost of purchasing this bond today?

Dirty price

Chemical Mines has 5,000 shareholders and is preparing to elect two new board members. You do not own enough shares to personally control the elections but are determined to oust the current leadership. Likewise, no other single shareholder owns sufficient shares to personally control the outcome of the election. Which one of the following is the most likely outcome of this situation given that some shareholders are happy with the existing management?

Proxy fight for control of the board

Which one of the following transactions occurs in the primary market?

Purchase of newly issued stock from the issuer

Which one of the following statements concerning interest rates is correct?

The effective annual rate equals the annual percentage rate when interest is compounded annually.

A premium bond that pays $60 in interest annually matures in seven years. The bond was originally issued three years ago at par. Which one of the following statements is accurate in respect to this bond today?

The yield to maturity is less than the coupon rate.

Recently, you discovered a convertible, callable bond with a semiannual coupon of 5 percent. If you purchase this bond you will have the right to:

convert the bond into equity shares.

Which one of the following sets of dividend payments best meets the definition of two

stage growth as it applies to the two-stage dividend growth model? - Dividend payments that increase by 10 percent per year for five years followed by dividends that increase by 3 percent annually thereafter

Reyes has a dividend yield of 5.4 percent and a total return for the year of 4.8 percent. Which one of the following must be true?

the stock has a negative capital gains yield

An ordinary annuity is best defined as:

equal payments paid at the end of regular intervals over a stated time period.

The difference between the price that a dealer is willing to pay and the price at which he or she is willing to sell is called the:

spread