the value of a bond
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1. What impact does the number of years until maturity have on the value of a bond?
2.List three capital budgeting methods (decision rules) and rank them from least to most useful. Defend your ranking.
3. Should capital budgeting projects be evaluated on their pre-tax or after tax cash flows? Why?
4. What is a stockholder? How does a stock split affect the stockholder?
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managerial finance
1. What impact does the number of years until maturity have on the value of a bond?
The number of years until maturity has a strong impact on the value of a bond. The number of years affects two calculations. It affect the yield to call, that is the rate of return that an investor would earn if he bought a callable bond at its present market value and held it till the call date given. Second, the number of years until maturity also effects the yield to maturity. This is the rate of return that an investor would earn if he bought the bond at its current market price and held it till maturity. This gives the discounted rate which equates the discounted value of a bond's future ...
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