1. Which of the following statement is true?
The yield to maturity on a premium bond exceeds the bond's coupon rate.
The higher the yield to maturity, the lower the current price of the bond.
The coupon rate is the coupon payment divided by the current price of the bond.
The regular interest payment of a bond is called the coupon payment
2. Which of the following statement is true?
Dividend growth rate is equivalent to dividend yield.
Assume a constant annual dividend. If there is a decline in the stock's price, the dividend yield increases.
The benchmark PE ratio can be used to value the stock of firms that pay no dividends.
Assume a constant dividend growth. Increase in the capital gains yield will increase the current value of a stock.