FM - the corporation does not protect the firm’s managers...

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(1.2) Corporate form of organization Answer: c MEDI UM i . Which of the following statements is CORRECT? a. A hostile takeover is the main method of transferring ownership interest in a corporation. b. Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organization. c. A corporation is a legal entity that is generally created by a state, and it has a life and existence that is separate from the lives of its individual owners and managers. d. Limited liability of its stockholders is an advantage of the corporate form of organization, but corporations have more trouble raising money in financial markets because of the complexity of this form of organization. e. Although its stockholders are insulated by limited legal liability, the legal status of
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Unformatted text preview: the corporation does not protect the firm’s managers in the same way, i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions. A 20-year, $1,000 par value bond has a 9% annual coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price after 6 years? a. $933.09 b. $935.22 * c. $961.82 d. $965.84 e. $978.40 Yest Corporation's bonds have a 15-year maturity, a 7% semiannual coupon, and a par value of $1,000. The going interest rate is 6%, based on semiannual compounding. What is the bond’s price? a. $1,008.65 b. $1,024.67 c. $1,051.34 d. $1,098.00 * e. $1,105.78 i...
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This note was uploaded on 06/28/2010 for the course FINANCE FIN3410 taught by Professor On9 during the Spring '10 term at New England Conservatory.

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FM - the corporation does not protect the firm’s managers...

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