Test Bank Complete_ Fundamentals of Corporate
Finance 13th Edition, (2021) By Stephen A. Ross,
Randolph W. Westerfield & Bradford D. Jordan |
Verified All Chapters 1-27| Newest Version
coupon - ANSWERThe stated interest payment
made on a bond
face value - ANSWERThe principal amount of a
bond that is repaid at the
end of the term. Also called
par value.
coupon rate - ANSWERThe annual coupon divided
by the face value of a bond.
(coupon rate = coupon/faсe value)
maturity - ANSWERThe specified date on
which the principal amount
of a bond is paid.
yield to maturity
(YTM) - ANSWERThe rate required in the
market on a bond.
Bond value - ANSWERPresent value of the coupons + Present value
of the face amount
current yield - ANSWERA bond's annual coupon
divided by its price.
indenture - ANSWERThe written agreement
between the corporation
and the lender detailing the
terms of the debt issue.
registered form - ANSWERThe form of bond issue
in which the registrar of
the company records
ownership of each bond;
payment is made directly to
the owner of record
bearer form - ANSWERThe form of bond issue in
which the bond is issued
, without record of the
owner's name; payment is
made to whomever holds
the bond
debenture - ANSWERAn unsecured debt, usually
with a maturity of 10 years
or more.
note - ANSWERAn unsecured debt, usually
with a maturity under 10
years.
sinking fund - ANSWERAn account managed by
the bond trustee for early
bond redemption.
call provision - ANSWERAn agreement giving the
corporation the option
to repurchase a bond at
a specifi ed price prior to
maturity.
call premium - ANSWERThe amount by which the
call price exceeds the par
value of a bond.
deferred call provision - ANSWERA call provision prohibiting
the company from
redeeming a bond prior
to a certain date.
call-protected bond - ANSWERA bond that, during a
certain period, cannot be
redeemed by the issuer.
protective covenant - ANSWERA part of the indenture
limiting certain actions that
might be taken during the
term of the loan, usually to
protect the lender's interest.
zero coupon bond - ANSWERA bond that makes no
coupon payments and is
thus initially priced at a
deep discount.
Finance 13th Edition, (2021) By Stephen A. Ross,
Randolph W. Westerfield & Bradford D. Jordan |
Verified All Chapters 1-27| Newest Version
coupon - ANSWERThe stated interest payment
made on a bond
face value - ANSWERThe principal amount of a
bond that is repaid at the
end of the term. Also called
par value.
coupon rate - ANSWERThe annual coupon divided
by the face value of a bond.
(coupon rate = coupon/faсe value)
maturity - ANSWERThe specified date on
which the principal amount
of a bond is paid.
yield to maturity
(YTM) - ANSWERThe rate required in the
market on a bond.
Bond value - ANSWERPresent value of the coupons + Present value
of the face amount
current yield - ANSWERA bond's annual coupon
divided by its price.
indenture - ANSWERThe written agreement
between the corporation
and the lender detailing the
terms of the debt issue.
registered form - ANSWERThe form of bond issue
in which the registrar of
the company records
ownership of each bond;
payment is made directly to
the owner of record
bearer form - ANSWERThe form of bond issue in
which the bond is issued
, without record of the
owner's name; payment is
made to whomever holds
the bond
debenture - ANSWERAn unsecured debt, usually
with a maturity of 10 years
or more.
note - ANSWERAn unsecured debt, usually
with a maturity under 10
years.
sinking fund - ANSWERAn account managed by
the bond trustee for early
bond redemption.
call provision - ANSWERAn agreement giving the
corporation the option
to repurchase a bond at
a specifi ed price prior to
maturity.
call premium - ANSWERThe amount by which the
call price exceeds the par
value of a bond.
deferred call provision - ANSWERA call provision prohibiting
the company from
redeeming a bond prior
to a certain date.
call-protected bond - ANSWERA bond that, during a
certain period, cannot be
redeemed by the issuer.
protective covenant - ANSWERA part of the indenture
limiting certain actions that
might be taken during the
term of the loan, usually to
protect the lender's interest.
zero coupon bond - ANSWERA bond that makes no
coupon payments and is
thus initially priced at a
deep discount.
