Bonds That Pay Very High Interest Rates and Typically Have

question 394

Multiple Choice

Bonds that pay very high interest rates and typically have a higher risk of default are known as

• A) zero-coupon bonds
• B) bearer bonds
• C) junk bonds
• D) volatile bonds

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Definitions:

Shares Outstanding

The total number of shares of a corporation that have been issued and are currently owned by shareholders.

Cost of Equity

The return a firm theoretically pays to its equity investors to compensate for the risk they take by investing in the stock.

Annual Dividend

The total amount of dividend payments a shareholder receives from a company in one year.

Market Price

The present price at which a good or service is available for purchase or sale in the market.