Question

which statement is true? one of the advantages of bond financing is that large sums of money can be raised and then paid back over a long time. a(n) ipo is the first time a corporation sells bonds to the public in order to raise capital. the rate of return on a zero-coupon bond currently selling for $850 that will pay $900 one year from now is 5.5 percent. when interest rates rise, bond prices rise.

Answer 1

One of the advantages of bond financing is that large sums of money can be raised and then paid back over a long time. An IPO refers to the first time a corporation sells stocks to the public. When interest rates rise, bond prices generally fall.

Step-by-step explanation:

The statement 'One of the advantages of bond financing is that large sums of money can be raised and then paid back over a long time' is true. Bond financing allows companies to raise significant amounts of money by issuing bonds to investors, and then repaying the borrowed amount over a predetermined period.

An IPO, or initial public offering, is the first time a corporation sells stocks to the public in order to raise capital, not bonds.

When interest rates rise, bond prices generally fall. This is because investors can get higher returns on newly issued bonds with higher interest rates compared to previously issued bonds.