25. If your company issued $1,000 bonds with a 20-year life and the coupon was 2.75%, how much interest expense would they show on their income statement per year if the total bond issue was $40,000,000 ?

1. Cannot tell from these facts
2. $250
3. $1,100,000
4. $700,000

26. You can afford a monthly mortgage payment of no more than $495. The home you have your eyes on is priced at $176,000. Assuming your lender will lend 80% LTV and you can afford the down payment, and interest rates are 4.35% over 360 months, does it appear this house meets your standards for affordability?

1. No, the payment is above $495
2. Yes, the payment is affordable
3. The payment is $534.56
4. Home lenders never offer 360 month loans

27.What is the holding period yield for an investor who pays $1,295.47 for a bond with a $1,000 face value and a 5% coupon and sells the bond three years later for $1,420.19?

1. 5.00%
2. 6.86%
3. 8.26%
4. 3.78%

Answer rating: 100% (QA)

Question 25 Bond Issue 40000000 Coupon rate 275 Interest Expe... View the full answer