Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Do bondholders fare better when the yield to maturity
increases or when it decreases? Why?
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- Assume that the risk-free rate increases, but the market risk premium remains constant. What impact would this have on the cost of debt? What impact would it have on the cost of equity? Start a New Threadarrow_forwardwhat happens to the bond prices when interest rate falls?arrow_forwardChoose from liquidity premium, taxability premium, default risk premium, maturity premium. 1.For a long term bond, bondholders demand a higher yield as compensation is called?2.When a bond has poor credit rating, bondholders demand a higher yield as compensation is called?3.When a bond has less frequent trading, bondholders demand a higher yield as compensation is called?arrow_forward
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