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Rama09 [41]
3 years ago
8

Listed below are some provisions that are often contained in bond indentures. Which of these provisions, viewed alone, would ten

d to reduce the yield to maturity that investors would otherwise require on a newly issued bond? 1. Fixed assets are used as security for a bond. 2. A given bond is subordinated to other classes of debt. 3. The bond can be converted into the firm's common stock. 4. The bond has a sinking fund. 5. The bond has a call provision. 6. The indenture contains covenants that restrict the use of additional debt. 1, 3, 4, 6 1, 4, 6 1, 2, 3, 4, 6 1, 2, 3, 4, 5, 6 1, 3, 4, 5, 6
Business
1 answer:
monitta3 years ago
4 0

Answer:

2. A given bond is subordinated to other classes of debt.

Explanation:A bond Indenture is a legally approved contract between a bond holder(the buyer of the bond) and a bond issuer(the original owner of the bond,who sold it to the bond holder).

Subordinated bond is also known as junior Securities or subordinated debt are bonds that are lower in rank compared to other bonds,a subordinated bond holder is only paid when other senior bond have been completely paid out.

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3 years ago
You want to invest $50,000 in a portfolio with a beta of no more than 1.4 and an expected return of 12.4%. Bay Corp. has a beta
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Answer:

Assume the weight to be invested in Bay Corp is x. That means (1 - x) will be the weight for City Inc. The expression for the expected return will be;

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0.112x + 0.148 - 0.148x = 0.124

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Read 2 more answers
On January 22, Jefferson County Rocks Inc., a marble contractor, issued for cash 210,000 shares of $30 par common stock at $34,
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Answer:

Jan. 22

Dr Cash $7,140,000

Cr Common Stock $6,300,000

Cr Paid in capital in excess of par $840,000

Feb. 27

Dr Cash $180,000

Cr Preferred Stock $135,000

Cr Paid-In Capital in Excess of Par-Preferred $45,000

Explanation:

Preparation of the entries for January 22 and February 27.

Jan. 22

Dr Cash $7,140,000

(210,000*$34)

Cr Common Stock $6,300,000

(210,000*$30)

Cr Paid in capital in excess of par $840,000

($7,140,000-$6,300,000)

Feb. 27

Dr Cash $180,000

(15,000*$12)

Cr Preferred Stock $135,000

(15,000*$9)

Cr Paid-In Capital in Excess of Par-Preferred $45,000

($180,000-$135,000)

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