Which of the following is not considered a factor to influence the bondholders required rate of...

Which of the following is not considered a factor to influence the bondholders required rate of return?

Financial risk
Other investments by the bondholder
Business risk
Risk premium

Expert Solution

Answer: 2^nd option

Other investments apart from the required should not be considered here.

Required rate is the internal rate of bond. All sorts of risks are factors there – such as financial risk, business risk, etc. Higher the risk higher would be the return; and vice versa. Risk premium is awarded by the company to bondholders in case of longer period of maturity.

jeff jeffy answered 2 years ago

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