The _____ of the Bond Is a Cost to the Firm

question 45

Multiple Choice

The _____ of the bond is a cost to the firm for using investors' funds.

• A) Coupon rate
• B) Internal rate of return
• C) Yield to maturity (YTM)
• D) Maturity value
• E) Discount rate

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Definitions:

Profit Rewards

The financial gains that accrue to entrepreneurs or investors as a result of taking a risk in the marketplace.

Pure Competition

A market structure characterized by a large number of small firms, a homogeneous product, and no single firm having market control.

Market Structure

The organizational and other characteristics of a market, influencing the level of competition and pricing within the market.

Oligopoly

A market structure in which a few firms sell either a standardized or differentiated product, into which entry is difficult, in which the firm has limited control over product price because of mutual interdependence (except when there is collusion among firms), and in which there is typically nonprice competition.