Bonds (Comprehension Text p 81)

Companies regularly finance their activities by issuing bonds.

• True

• False

Tags

CCSS.RI.8.2

CCSS.RL.11-12.2

CCSS.RL.7.1

CCSS.RL.8.1

CCSS.RL.9-10.2

If you answered false to Question 1 justify by quoting from the text.

Tags

CCSS.RI. 9-10.2

CCSS.RI.11-12.2

CCSS.RL.11-12.2

CCSS.RL.8.2

CCSS.RL.9-10.2

Bond issuing companies use investment banks to find investors.

• True

• False

Tags

CCSS.RI.11-12.5

CCSS.RI.6.5

CCSS.RI.7.5

CCSS.RI.8.5

CCSS.RI.9-10.5

Bonds are repaid at 100% when they mature, unless the borrower is insolvent.

• True

• False

Tags

CCSS.RI.11-12.5

CCSS.RI.6.5

CCSS.RI.7.5

CCSS.RI.8.5

CCSS.RI.9-10.5

Bondholders get their money back if a company goes bankrupt.

• True

• False

Tags

CCSS.RI.7.2

CCSS.RI.8.2

CCSS.RL.11-12.2

CCSS.RL.8.1

CCSS.RL.9-10.2

If you answered false to question 5, justify by quoting from the text

Tags

CCSS.RI. 9-10.2

CCSS.RI.11-12.2

CCSS.RL.11-12.2

CCSS.RL.8.2

CCSS.RL.9-10.2

Bond coupons are generally lower than share dividends.

• True

• False

Tags

CCSS.RI.8.2

CCSS.RL.11-12.2

CCSS.RL.7.1

CCSS.RL.8.1

CCSS.RL.9-10.2

For profitable companies, there are tax advantages to issuing stocks or shares rather than bonds.

• True

• False

If you answered false to question 8, justify by quoting from the text.

Tags

CCSS.RI.11-12.7

CCSS.RI.8.7

CCSS.RI.9-10.7

CCSS.RL.11-12.7

CCSS.RL.9-10.7

A bond paying 5% interest would lose in value if interest rates fell to 4%

• True

• False

Tags

CCSS.HSF.BF.A.2