Which of the following factors is most likely to explain


1. A 3-year $1000 face value bond pays an annual coupon of 7% and has a ytm of 3.5%. What is this bond's price? What is this bond's duration?

2. Longer the maturity, higher is the cost of a bond. Is It TRUE OR FALSE

3. Which of the following factors is most likely to explain why a company decides to increase its annual dividend?

a. Management believe that the increase can be sustained.

b. The Pecking order theory.

c. The firm has just paid a scrip dividend.

d. A firm belief by management that dividends represent a residual payment.

e. The firm has a large number of desirable projects.

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Financial Management: Which of the following factors is most likely to explain
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