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FINA 3000 EXAM 2 QUESTIONS AND CORRECT ANSWERS

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FINA 3000 EXAM 2 QUESTIONS AND CORRECT ANSWERS

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The legal document in which the provisions of a corporate bond are spelled out is the


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indenture




Which of the following statements about preferred stock is not true


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most preferred stock is participating




If a corporation wishes to pay off its bonds gradually over time they will probably
establish a

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sinking fund




If a corporation's bond rating was just changed from a B to BB, what is the result?


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The bonds yield is lower




A secured bond is a


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mortgage




A preferred stock with a par value of $40 pays a $12 annual dividend, if you require an
8% rate of return on similar investments, what is the value


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$150




Which of the following types of bonds are issued by the federal gov?


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