answer 10 11 12 14 d conversion feature 7 Which of the follo

answer 10 11 12 14

d. conversion feature 7. Which of the following is not a type of equity financing? a. retained earnings b. debentures c. common stock d. preferred stock 8 A preferred stock pays a $4.00 annual dividend. If you require an 12% rate of return on similar risk investments, what is the value of a share of this preferred stock? a. $.48 b. $4.48 c. $33.33 d. $48.00 9. Which of the following types of bonds are issued by state or local governments? a. Treasury notes b. subordinated debentures c. Federal agency bond:s d. municipal bonds 10. The greater the liquidity of a bond the a. lower the interest rate b. higher the interest rate 11, A corporate 9.5% coupon bond has a yield to maturity of 100%. A bondholder will receive how much in interest each year? a. $9.50 b. $10.00 c. $95.00 d. $100.00

Solution

10)

Interest rates depend on many factors, one is liquidity of bond. Liquidity of bond and interest rate has inverse relationship. If liquidity increase interest rate will decrease and vice-versa.

Hence, correct option is (a). lower the interest rate.