All Else the Same, If Interest Rates Fall, Then Bond

question 45

True/False

All else the same, if interest rates fall, then bond prices will rise.

---

Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government.

After-Tax Cost

The actual cost of an expense or investment to a company or individual after accounting for the effects of taxes.

WACC

The Weighted Average Cost of Capital (WACC) refers to the average rate of return a company is expected to pay to its security holders to finance its assets.

Debt Ratio

The debt ratio is a financial metric that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.