What is the effective yield on a bond? The effective yield on a bond is the O A. bond's rate of return. O B. coupon payment divided by the rate of return. O C. cash payment a bond makes every six months to its owner. OD. coupon payment divided by the price of the bond. O E. principal payment of a bond paid upon maturity. How does one calculate it? A bond's effective yield is O A. the bond's credit rating divided by the bond's likelihood of default. O'B, the interest rate that equates the present value of the bond's payment stream with the bond's credit rating. O C. the interest rate that equates the present value of the bond's payment stream with the bond's market price. O D. the market price that equates the present value of the bond's payment stream with that of other bonds. O E. the likelihood of default that equates the present value of the bond's payment stream with the bond's market price. Why do some corporate bonds have higher effective yields than others? The effective yield on a corporation's bonds will tend to be higher when O A. that corporation is more risky. B. that corporation is less likely to default on its bond payments. C. that corporation is financially stronger