9. (TCO 10) A bond with a coupon of $75 per year, maturing in 10 years at a value of $1,000 and current market price of $776 will have a current yield of (Points: 2)
11.3%
10.2%
9.7%
7.5%
10. (TCO 10) A bond with a coupon rate of 8.2%, maturing in 5 years at a value of $1,000 and a current market price of $720, will have a yield to maturity (using the approximation formula) of (Points: 2)
25.8%
18.6%
15.2%
16.6%
11. (TCO 1) Publicly traded companies generally have (Points: 2)
more pressure for short-term performance
less pressure for short-term performance
very strong stock market performance
low distribution costs when selling securities
12. (TCO 11) A capital lease: (Points: 2)
is generally used by corporations more often than an operating lease.
is placed on the balance sheet.
is capitalized.
all of the above.
13. (TCO 11) Which of the following are advantages of leasing? (Points: 2)
A lease obligation may be substantially less restrictive than the provisions of a bond indenture.
There may be no down payment as in a purchase.
The negative effects of obsolescence may be eliminated.
All of the above.
14. (TCO 11) Which one of these conditions must be met for a lease to qualify as a capital lease? (Points: 2)
The lease must have a value of at least $10 million.
The lease contains a bargain purchase price at the end of the lease.
The lease must have a life of 10 years.
All of the above.
15. (TCO 11) An operating lease (Points: 2)
has a lease term equal to 75% or more of the estimated property.
is usually short-term and is often cancellable at the option of the lessee.
must show up on the balance sheet.
does not appear on any financial statements.