If market interest rate falls to zero, then bonds can be issued at zero coupon rates and their market values would be zero. FALSE
Their market value will be equal to par value
Interest rate risk for bonds decreases as bond maturity decreases and as the frequency of bond interest payments rises. TRUE
Risk reduces with time to maturity
The fair market value of a stock rises with the expected dividend growth rate. TRUE
Value of stock is dependent on dividend growth rate
Companies interested in maximizing shareholder value should choose capital projects with a Net Present Value of at least zero. TRUE – 0 or greater than 0
Discounting a cash flow stream using the IRR could result in a positive or negative NPV project. FALSE, will result in 0 NPV
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