Chapter 6-9 Flashcards
What is the Maturity rate on the calculator?
What is the coupon rate on the calculator?
What is the yield on the calculator?
Maturity = N
Coupon Rate = PMT
Yield = I/Y
Premium Price
Par Price
Discount Price
Bond Yield < Coupon Rate
Yield = Coupon Rate
BondYield > Coupon Rate
Required Rate of Return also known as
Discount rate and yield
Dividends in arrears
Getting paid past dividends.
Beta
Systematic risk for a particular stock.
Non-diversifiable risk also known as
Systematic risk
idiosyncratic risk
Diversifying stocks can decrease this risk.
Capital Budgeting Analysis
Helps to decide what assets to purchase or invest in.
Cost of debt
The required return by investors when they purchase your company’s debt such as bonds.
External Equity
Funds from other means
Do preferred stocks have a growth rate?
No
Trading at a Rate is also known as
Risk-free rate
Treasury Bonds Returning
Market Rate is also known as
Market Return
