FM compre

2. For a given time to maturity, bonds with …………….. coupon rates are more sensitive to changes in interest rates.
5. Operating leverage is a measure of a proportion of operating expenses that are ……… costs.
6. …………… is a series of equal cash flows that occur at regular intervals for a fixed number of periods.
9. …………. stock holders are given certain priority over common stock holders in the distribution of dividends.
10. Dividend policy is often described as .................
13. EAC is most useful when comparing mutually exclusive projects with ………… lives.
14. The Fisher Effect implies that when expected inflation rises, nominal interest rates will ……….. to maintain the real rate.
17. A high dividend payout ratio might indicate fewer opportunities for ………….. within the firm. Reinvestment
18. The corporation prepares the list of all shareholders entitled to receive the dividend on the ……………… date.
19. If a company issues bonus shared the debt equity ratio will ………….

1. A …………….. bond pays no periodic interest and is sold at a discount to its face value.
2. In MM Proposition II (without taxes), the cost of equity increases in direct proportion to the firm's _______ , reflecting the higher financial risk borne by shareholders.
3. Leasing and buying are the alternate financing arrangements for the use of the ……...
4. The crossover rate is the ................. rate at which two mutually exclusive projects have equal NPVs.
7. According to the pecking order theory, firms issue equity when they believe their stock is ……………..
8. For a risk-free asset, the investor knows the expected returns with…………..….
11. ………………………………… is calculated as the annual coupon paid divided by current market price of the bond.
12. A risk premium is essentially the _______ return that compensates investors for taking on additional risk.
15. The price of a stock is equal to the present value of the all expected future ……………
16. In a lease analysis, the discount rate used should reflect the lessee’s after-tax cost of ………..