If the stated annual interest rate is 9% and the frequency of compounding is daily, the effective annual rate (EAR) is closest to:
A. 9.42%.
B. 9.00%.
C. 9.86%.
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Holding all other characteristics the same, the bond exposed to the greatest level of reinvestment risk is most likely the one selling at:
A discount.
B. A premium.
C. par.
A firms estimated costs of debt, preferred stock, and common stock are 12%,17%, and 20%, respectively. Assuming equal funding from each source and a marginal tax rate of 40%, the weighted average cost
A. 13.9%.
B. 16.3%.
C. 14.7%.
Which date in the chronology of a dividend payment is most likely determined by a security exchange?
A. Ex-dividend date
B. Holder-of-record date
C. Declaration date
Centro Corp. recently issued a floating-rate note (FRN) that includes a feature that prevents its coupon rate from falling below a prespecified minimum rate. This feature in an FRN is most likely refe
A. collar.
B. floor.
C. cap.