We would expect the interest rate on Bond A to be lower than the interest rate on Bond B if the two bonds have identical characteristics except that: a. Bond A was issued by a financially weak corporation and Bond B was issued by a financially strong corporation.

b. Bond A was issued by the Exxon Mobil Corporation and Bond B was issued by the state of New York.

c. Bond A has a term of 1 year and Bond B has a term of 5 years.

d. All of the above are correct.

The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.

After testing its water, a city water department issues a report to the related citizens, noting what chemicals have been identified, their doses, and the estimated risks of exposure at these levels. this report represents a type of

Which of the following is a function performed by market prices? a. market prices communicate information to buyers and sellers. b. market prices coordinate the decisions of buyers and sellers. c. market prices motivate entrepreneurs to produce those products that are currently most desired relative to their costs of production. d. all of the above are functions performed by market prices.