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Unformatted text preview: lower the coupon rate, the greater the interest rate risk-All other things being equal, the longer the time to maturity, the greater the interest rate risk-The present value of the face amount will be much more volatile with a long-term bon-Call price is above the bond’s stated value -Bond ratings considered only with the possibility of default -Value of a floating rate bond depends on exactly how the coupon payment adjustmen are defined-Debt requires fixed payments of interest and principle over time(first claim in bankruptcy)-Equity only has a residual claim on firm assets and does not require any ongoing payments(behind debt-holders in bankruptcy)...
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