Questions from Corporate Finance

Q: All else equal, which bond’s price is more affected by a

All else equal, which bond’s price is more affected by a change in interest rates, a short-term bond or a longer-term bond? Why?

Q: All else equal, which bond’s price is more affected by a

All else equal, which bond’s price is more affected by a change in interest rates, a bond with a large coupon or a small coupon? Why?

Q: Compare and contrast the advantages and disadvantages of the current yield computation

Compare and contrast the advantages and disadvantages of the current yield computation versus yield to maturity calculations.

Q: What is the yield to call and why is it important to

What is the yield to call and why is it important to a bond investor?

Q: What is the purpose of computing the equivalent taxable yield of a

What is the purpose of computing the equivalent taxable yield of a municipal bond?

Q: Campbell Supper Co. paid a $0.632 dividend per

Campbell Supper Co. paid a $0.632 dividend per share in 2013, which grew to $0.76 in 2016. This growth is expected to continue. What is the value of this stock at the beginning of 2017 when the requir...

Q: The average annual return on the S&P 500 Index from

The average annual return on the S&P 500 Index from 1986 to 1995 was 15.8 percent. The average annual T-bill yield during the same period was 5.6 percent. What was the market risk premium during these...

Q: Why does a Treasury bond offer a lower yield than a corporate

Why does a Treasury bond offer a lower yield than a corporate bond with the same time to maturity? Could a corporate bond with a different time to maturity offer a lower yield? Explain.

Q: Explain how a bond’s interest rate can change over time even if

Explain how a bond’s interest rate can change over time even if interest rates in the economy do not change.

Q: Explain why high income and wealthy people are more likely to buy

Explain why high income and wealthy people are more likely to buy a municipal bond than a corporate bond.