Which of the following factors favor the issuance of debt


1. Tyson, Inc. issued a 20-year bond which is callable in 12 years. It has a coupon rate of 11% payable semiannually, has a call premium of $185, and is currently selling for $1150. What is the yield to call?

7.82%

8.72%

9.95%

9.70%

2. Which of the following factors favor the issuance of debt in the financing decision?

I. Market signaling

II. Distress costs

III. Management incentives

IV. Financial flexibility

 I and II only

 I and III only

 II and IV only

 I, II, and III only

 I, II, and IV only

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Financial Management: Which of the following factors favor the issuance of debt
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