6) A bond pays $60 per year in interest and has a $1000 par value

6) A bond pays $60 per year in interest and has a $1000 par value. The market rate of interest is 8%. What is the coupon rate for this bond?

a. 2%

b. 6%

c. 8%

d. 14%

7. A firm in the 40% marginal tax bracket pays a bank 10% on a loan. What is the after-tax cost of debt for the firm?

a. 4%

b. 6%

c. 10%

d. 14%

8. The major financial assets of a firm do NOT include

a. turnover ratios

b. liquidity ratios

c. accrued ratios

d. profitability ratios

9. As the interest rate goes up, the present value of a future amount will

a. go up

b. go down

c. remain the same

d. fluctuate

10. If a firm undertakes all worthwhile projects and pays out dividends when and only when funds are available, it follows the

a. asymmetric dividend theory

b. dividend signaling hypothesis

c. impairment of capital theory

d. residual theory of dividends