Consider a 12 Percent, 15-Year Bond That Pays Interest Semiannually

question 115

Multiple Choice

Consider a 12 percent, 15-year bond that pays interest semiannually, and its current price is $675. What is the promised yield to maturity?

• A) 10.23 percent
• B) 18.45 percent
• C) 17.77 percent
• D) 2.31 percent
• E) 9.26 percent

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Definitions:

Inventory Turnover

A metric indicating the frequency at which a company's inventory is sold and replenished within a specific timeframe.

Dividend Yield

A metric showing the yearly dividend payouts of a company as a proportion of its stock price.

Gross Margin Ratio

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold; used to assess a company's financial health.

Return on Common Stockholders' Equity

A financial ratio that measures the profitability generated from the common stockholders' equity investment, indicating how efficiently equity capital is being utilized.