Question: 24. A___________ is generally defined as a long-term debt with an initial maturity of 10 years or less, whereas a___________ is a long-term debt with

24. A___________ is generally defined as a long-term debt with an initial maturity of 10 years or less, whereas a___________ is a long-term debt with an initial maturity of more than 10 years.

A.Note; bond

B.Bond; note

C.Unfunded debt; note

D.Note; unfunded debt

25.True or False. Compounding during the year can lead to a significant difference between the quoted rate and the effective annual rate.A.TrueB.False

26. Suppose XYZ Corporation wants to issue a $1,000 bond with 20years to maturity. This bond has an annual coupon rate of 10%. Similar bonds have a yield to maturity of 10%. What is the present value of coupons?

A.$ 14.86

B.$ 148.64

C.$ 491.57

D.$ 851.36

27. Use the information provided in question 26. What is the present value of face value?

A.$ 83.33

B.$ 148.64

C.$ 851.36

D.$ 909.09

28. In class, we talked about the differences between debt and equity. True or False: Common shareholders do not have voting power, whereas creditors vote for the board of directors and other issues.

A.True

B.False

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