Answer:
b. The bond puttable in 10 years will depreciate more than the bond puttable in 5 years
Explanation:
Data provided in the question
20 -year corporate bond i.e issued at par at 10%
One issue is for 5 years
other issue is for 10 years
Now if the interest rate rise by 200 basis points
So,
Based on the above information
If a bond is issued at a future date, any price drop due to higher interest rates will be eliminated as the holder is able to return the bond to the issuer earlier
Hence, the option B is correct
<span>A company that continues to have strong profit performance during an economic downturn when many other companies are suffering losses or failing should see their bond rating maintained or actually increase.
A bond rating lets one know of the credit quality and the means to pay back the bond with in a reasonable amount of time. Bonds are rated using letters and receive a grade based on their profit performance.
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Answer:
When the company gets cash from a bank loan,
Cash Debits
Bank Loan Account Credits
what happens is that the Assets increase and the Liabilities also increase.
Explanation:
Answer: d. it is impossible to specify all opportunistic actions by an alliance partner
Explanation:
A strategic alliance is simply an agreement that takes place between two or more parties in order to pursue a certain goal even though they still remain independent organizations.
The main problem with relying on contracts to reduce opportunistic behavior by alliance partners is that it is
impossible to specify all opportunistic actions by an alliance partner.
