Which one of the following relationships is stated correctly? Multiple Choice The capital gains yield is equal to zero for a zero coupon bond. Increasing the coupon rate decreases the current yield, all else constant. Decreasing the time to maturity increases the price of a discount bond, all else constant. The coupon rate exceeds the current yield when a bond sells at a discount.

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan