when contract rate of interest on bonds is less than the market rate the inteest the...
when contract rate of interest on bonds is less than the market rate the inteest the bond sell at
Homework Answers
when contract rate of interest on bonds is less than the market rate the interest the bond sell at Discount.
Explanation: When bond coupon rate is less than the market rate, thus to make bond more attractive for the investors bonds are sell at discount ie below its par value.
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when contract rate of interest on bonds is less than
the market rate the inteest the...
If a entity sells bonds at a premium: The bonds' contract rate is less than the...
If a entity sells bonds at a premium: The bonds' contract rate is less than the market rate at issuance. The bonds' contract rate is the same as the markets at issuance. During the bonds' term, the market rate changes and is becomes lower than the bonds' contract rate. The bonds' contract rate is higher than the market rate at issuance. The bonds' contract rate is the same as the market rate at issuance. The bonds' contract rate is lower...
if the market rate of interest is greater than the contractual rate of interest, bonds will...
if the market rate of interest is greater than the contractual rate of interest, bonds will sell
if a bonds coupon rate is greater than market, then the bond will sell at price...
if a bonds coupon rate is greater than market, then the bond
will sell at price
QUESTION 3 If a bond's coupon rate is greater than market rate, then bond will sell at price than its face value; these are called bonds. less, discount less, premium more, premium more, discount Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All A
Terms and Definitions The interest rate paid on the face amount of a bond is called...
Terms and Definitions The interest rate paid on the face amount of a bond is called the contract rate of interest. The interest rate paid on similar risk bonds is called the market rate of interest. When the contract rate of interest is less than the market rate of interest, the bonds will sell for less than their face value. The difference between the selling price and the face amount of the bonds in this case is called a discount...
6) Which of the following statements about bonds is true? A) If market interest rates are...
6) Which of the following statements about bonds is true? A) If market interest rates are above a bond's coupon interest rate, then the bond will sell below its par value. B) As the maturity date of a bond approaches, the market value of a bond will become more volatile. C) Bond prices move in the same direction as market interest rates. D) Long-term bonds have less interest rate risk than do short-term bonds.
Match the following definitions with the terms below: 45. The stated interest rate is more than...
Match the following definitions with the terms below: 45. The stated interest rate is more than the market interest rate. 46. The stated interest rate is less than the market interest rate. 47. The rate quoted in the bond contract used to calculate the cash payments for interest. 48. The stated interest rate equals the market interest rate 49. The true interest rate used by investors to value a bond. 50. The mixture of liabilities and stockholders' equity a business...
When a bond sells at a premium Multiple Choice The contract rate is above the market...
When a bond sells at a premium Multiple Choice The contract rate is above the market rate The contract rate is equal to the market rate The contract rate is below the market rate It means that the bond is a zero coupon bond. The bond pays no interest.
Which of the following describes what happens when bonds are issued when the market interest rate...
Which of the following describes what happens when bonds are issued when the market interest rate is less than the stated interest rate? Multiple Choice The bonds are issued at a premium. The bonds are issued at less than their face value. o It raises the effectiv It raises the effective interest rate above the stated rate of interest. o o The bands are su The bonds are issued at a premium and the effective interest rate is higher than...
1. If the market interest rate is 9% when Dolphin Corp. issues its bonds, will the bonds be price...
1. If the market interest rate is 9% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. If the market interest rate is 11% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. Assume that the issue price of the bonds is 96. Journalize the following bonds payable transactions a. Issuance of the bonds on February...
A bond is issued at discount ________. when a bond's stated interest rate is more than...
A bond is issued at discount ________. when a bond's stated interest rate is more than the effective interest rate when a bond's stated interest rate is less than the market interest rate when a bond's stated interest rate is equal to the market interest rate when a bond's stated interest rate is higher than the market interest rate
if a bonds coupon rate is greater than market, then the bond
will sell at price
QUESTION 3 If a bond's coupon rate is greater than market rate, then bond will sell at price than its face value; these are called bonds. less, discount less, premium more, premium more, discount Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All A
Terms and Definitions The interest rate paid on the face amount of a bond is called the contract rate of interest. The interest rate paid on similar risk bonds is called the market rate of interest. When the contract rate of interest is less than the market rate of interest, the bonds will sell for less than their face value. The difference between the selling price and the face amount of the bonds in this case is called a discount...
6) Which of the following statements about bonds is true? A) If market interest rates are above a bond's coupon interest rate, then the bond will sell below its par value. B) As the maturity date of a bond approaches, the market value of a bond will become more volatile. C) Bond prices move in the same direction as market interest rates. D) Long-term bonds have less interest rate risk than do short-term bonds.
Match the following definitions with the terms below: 45. The stated interest rate is more than the market interest rate. 46. The stated interest rate is less than the market interest rate. 47. The rate quoted in the bond contract used to calculate the cash payments for interest. 48. The stated interest rate equals the market interest rate 49. The true interest rate used by investors to value a bond. 50. The mixture of liabilities and stockholders' equity a business...
When a bond sells at a premium Multiple Choice The contract rate is above the market rate The contract rate is equal to the market rate The contract rate is below the market rate It means that the bond is a zero coupon bond. The bond pays no interest.
Which of the following describes what happens when bonds are issued when the market interest rate is less than the stated interest rate? Multiple Choice The bonds are issued at a premium. The bonds are issued at less than their face value. o It raises the effectiv It raises the effective interest rate above the stated rate of interest. o o The bands are su The bonds are issued at a premium and the effective interest rate is higher than...
1. If the market interest rate is 9% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. If the market interest rate is 11% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. Assume that the issue price of the bonds is 96. Journalize the following bonds payable transactions a. Issuance of the bonds on February...
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