Question

hi, could you please simply answer these as true or false

8) A Zero-coupon bond pays no coupon for the 1st half of the bond life. _ 9) Flotation Costs decrease the cost of capital for a firm. 10) The rate of return for Preferred Stock is reduced by the tax rate of the firm. 11) Preferred Stock has characteristics of both bonds and common stock. 12) Cumulative feature of Preferred Stock generally allows for voting provisions if a dividend is missed. 13) The profit-retention rate equals the dividends paid to common stockholders. 14) The Capital Asset Pricing Model - Market Rate of Return + Beta (Risk-Free Rate - Market Rate of Return) 15) If the Required Rate of Return and the Coupon rate are equal a bond will sell at a discount.

Answer 1

1.
True

2.
False, increases

3.
False, not affected by tax rate

4.
True

5.
False

6.
False, profit*(1-retention rate)

7.
False

8.
False, sell at par