FI 302 Exam 2 term study guide

_______________ means that the percentage increases in the dividend is the same each year

contrast growth

The _____ is the regular interest payment of the bond

coupon

A bond is a ___________ instrument by which a borrower of funds agrees to pay back the funds with interest on specific dates in the future

long term debt

The __________ is the expiration date of the bond

maturity date

In ________________, current prices already reflect the price history and volume of the stock as well as all available public information

operationally efficient markets

bonds are different from stock because

bonds promise fixed payments for the length of their maturity

The ______ is the interest rate printed on the bond

coupon rate

Zero Coupons Bonds are priced

priced at deep discount

You can think of the ________ as the "used stock" market because these shares have be owned or "used" previously

secondary market

"Junk" bonds are a street name for _________ grade bonds

speculative

The __________ is a market derived interest rate used to discount the future cash flows of the bond

yield to maturity

When the ___ is less than the yield to maturity, the bond sells at a/the ___ the par value.

coupon rate / discount to

The holder of preferred stock is entitled to a constant dividend when?

every period

the value of financial assets is the ___________

present value of all of the future cash flows that will be received