1. Tyson, Inc. issued a 20-year bond which is callable in 12 years. It has a coupon rate of 11% payable semiannually, has a call premium of $185, and is currently selling for $1150. What is the yield to call?
7.82%
8.72%
9.95%
9.70%
2. Which of the following factors favor the issuance of debt in the financing decision?
I. Market signaling
II. Distress costs
III. Management incentives
IV. Financial flexibility
I and II only
I and III only
II and IV only
I, II, and III only
I, II, and IV only