Financial Management - Study Mode
[#881] Type of bonds that pays no coupon payment but provides little appreciation are classified as
Correct Answer
(C) zero coupon bond
Explanation
Solution: Type of bonds that pays no coupon payment but provides little appreciation are classified as zero coupon bond. A zero-coupon bond is a bond where the face value is repaid at the time of maturity. Note that this definition assumes a positive time value of money. It does not make periodic interest payments, or have so-called coupons, hence the term zero-coupon bond.
[#882] In call provision, it is stated that company will pay to issue an amount
Correct Answer
(A) higher than par value
Explanation
Solution: In call provision, it is stated that company will pay to issue an amount higher than par value. A call provision is a provision in a bond contract that gives the issuing corporation the right to redeem the bonds under specified terms prior to the normal maturity date. The call provision generally states that the company must pay the bondholders an amount greater than the par value if they are called.
[#883] Baumol's Model of Cash Management attempts to:
Correct Answer
(C) Minimization of total cost
[#884] Which of the following is not applied in capital budgeting?
Correct Answer
(C) All accrued costs and revenues be incorporated
[#885] Which of the following is not a type of dividend payment?
Correct Answer
(C) Share Split