As bondholders required rates of return change

As bondholders required rates of return change, the

11. As bondholders’ required rates of return change, the ________ of outstanding bonds will also change.

a. maturity date       b. face value     c. coupon payment                 d. price

12. You are reviewing two mutually exclusive projects. You have used several methods of evaluating their profitability. All else being equal, which one will you choose:

a. The project with the lower payback period

b.   The project with the highest IRR.

c.   The project with the highest NPV.

13. Old Imbalance Footwear, Inc., stock pays $3.20/share each year in dividends, with investors’ required

return equaling 10%. What is the price of a share of stock?

a. $320       b. $16         c. $32