Under which of the following situation, would a firm most likely to call its outstanding callable bonds? Group of answer choices a)The firm has financial distress. b)The company’s bonds are downgraded. c)The market interest rate increases d)The market interest rate declines
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Under which of the following situation, would a firm most likely to call its outstanding callable bonds?
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- Which of the following events would make it more likely that a company would choose to call it’s outstanding callable bonds? An increase in market interest rates. An increase in the call premium. All the other statements are correct. The company’s bonds are downgraded. A reduction in market interest rates.Which of the following events would make it more likely that a company would call its outstanding callable bonds? State your reason for the answer. The company’s bonds are downgraded. Market interest rates rise sharply. The company's financial situation deteriorates significantly. Inflation increases significantly. Market interest rates decline sharplyWhich of the following events would make it more likely that a company would choose to call its outstanding callable bonds? * Market interest rates rise sharply. The company's financial situation deteriorates significantly. Inflation increases significantly. Market interest rates decline sharply. The company's bonds are downgraded.
- Which of the following events would make it less likely that a company would choose to call its outstanding callable bonds? O The company's financial situation improves significantly. O Ratings on the company's bonds are upgraded. O Inflation decreases significantly. Market interest rates decline sharply. O Market interest rates rise sharply.Which of the following statements is false? A. Banks have high levels of liquidity assets and stable funding since the financial crisis. B. Compared with bonds with short-term duration, bonds with long-term duration have uncertainty regarding future creditworthiness. C. Expected loss can decrease with an increase in a bond’s recovery rate. D. Macaulay duration is calculated as modified duration divided by one plus the bond’s yield to maturity.Which of the following events would make it more likely that a company would call its outstanding callable bonds? (Ch. 7) Group of answer choices Inflation increases significantly. The company’s bonds are downgraded. Market interest rates rise sharply. The company's financial situation deteriorates significantly. Market interest rates decline sharply.
- Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds? 1.Market interest rates decline sharply. 2.The company's bonds are downgraded. 3.Market interest rates rise sharply. 4.Inflation increases significantly. 5.The company's financial situation deteriorates significantly.Question 1 Indicate whether each of the following actions will increase or decrease a bond’s yield tomaturity: a. A bond’s price increase. b. The company’s bonds are downgraded by the rating agencies. c. A change in the bankruptcy code makes it more difficult for bondholders to receivepayments in the event a firm declares bankruptcy. d. The economy enters a recession. Question 2 .If a company’s beta were to double, would it expected return double? Question 3.Are there conditions under which a firm might be better off if it were to choose a machine with arapid payback rather than one with a larger NPV?A corporation suffering big losses might be more likely to suspend interest payments on its bonds, thereby ☐a. lowering the default risk and causing the demand for its bonds to rise. O b. raising the default risk and causing the demand for its bonds to fall. C. lowering the default risk and causing the demand for its bonds to fall. O d. raising the default risk and causing the demand for its bonds to rise.
- Which of the following statements is most correct? Why?* choices: a. The expected return on corporate bonds will generally exceed the yield to maturity. b. Firms that are in financial distress are forced to declare bankruptcy. c. All else equal, senior debt will generally have a lower yield to maturity than subordinated debt. d. Statements a and c are correct. e. None of the statements above is correct.Indicate whether each of the following actions will increase or decrease a bond’s yield tomaturity:a. The bond’s price increases.b. The bond is downgraded by the rating agencies.c. A change in the bankruptcy code makes it more difficult for bondholders to receivepayments in the event the firm declares bankruptcy.d. The economy seems to be shifting from a boom to a recession. Discuss the effects ofthe firm’s credit strength in your answer.e. Investors learn that the bonds are subordinated to another debt issue.Which statement is FALSE regarding bonds?Select one:The pay back their face value within their maturity.They can be traded on secondary markets. Entitles its holder for cash inflows.When issued they increase the equity of the firm.