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If the Capital Stock Equals 200 Units in Year One

question 56

Multiple Choice

If the capital stock equals 200 units in year one and the depreciation rate is 5 percent per year,then in year two,assuming no new or replacement investment,the capital stock would equal _____ units.


Definitions:

Coupon Bond

A bond that pays the holder a fixed interest rate (coupon) over the bond's lifetime and repays the principal at maturity.

Current Yield

A measure of the annual income (interest or dividends) generated by an investment, expressed as a percentage of the current market price.

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value. For bonds, it's the amount to be repaid at maturity; for stocks, it's the nominal value assigned upon issuance.

Callable Bond

A type of bond that gives the issuer the right to redeem the bond at a predetermined price before its maturity date.

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