if the market rate of interest is greater than the contractual rate of interest, bonds will...
Homework Answers
Ans. The bonds are sold on the base of contractual rate of interest so If market rate of interest is higher than the contract rate, then the bonds will sale on discount.
The discount is a amount which is less than the face value, so the bonds will sell on lower amount of the face value of bonds.
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if
the market rate of interest is greater than the contractual rate of
interest, bonds will...
2) If a firm issues bonds with a contractual interest rate that is higher than the...
2) If a firm issues bonds with a contractual interest rate that is higher than the market interest rate, the bond is issued at a premium or a discount? Does this represent an addition to or reduction from the cost of borrowing?
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
Question 16 (0.5 points) If the contractual (stated) interest rate is 9% and the market (effective)...
Question 16 (0.5 points) If the contractual (stated) interest rate is 9% and the market (effective) interest rate is 11% on the day the bonds are sold, the bonds will sell at face value. O a discount. O a premium.
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
22. The interest rate investors demand for loaning funds is the a. market interest rate. b....
22. The interest rate investors demand for loaning funds is the a. market interest rate. b. stated rate. C. contractual interest rate. d. bond interest rate. 23. If bonds can be converted into common stock, a. they will sell at a lower price than comparable bonds without a conversion feature. b. they will carry a higher interest rate than comparable bonds without the conversion feature. C. they will be converted only if the issuer calls them in for conversion. d....
If an interest-bearing note payable is issued at a premium, then the contractual cash payment for...
If an interest-bearing note payable is issued at a premium, then the contractual cash payment for interest is greater than interest expense. less than interest expense. equal to interest expense. based on the market rate of interest. D Question 4 2 pts A debt covenant serves to give assurance to a creditor that the debtor will have the ability to pay interest and principal at maturity serves to give assurance to the debtor that the interest rate is reasonable. allows...
If interest expense is less than the contractual interest payment, then A. the note was issued...
If interest expense is less than the contractual interest payment, then A. the note was issued at a premium. B. the note was issued at a discount. C. the note was issued at par. D. the company should refinance the note to get a better interest rate.
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.
If the market rate of interest is 10%, a $15000, 13%, 10-year bond that pays interest...
If the market rate of interest is 10%, a $15000, 13%, 10-year bond that pays interest annually would sell at an amount equal to face value. less than face value. that cannot be determined. greater than face value.
Why would bonds ever sell at a premium? Stated Rate = Market Rate Stated Rate >...
Why would bonds ever sell at a premium? Stated Rate = Market Rate Stated Rate > Market Rate Stated Rate < Market Rate QUESTION 2 Why would bonds ever sell at a discount? Stated Rate = Market Rate Stated Rate > Market Rate Stated Rate < Market Rate QUESTION 3 At what amount do bonds sell for if the Stated Rate is equal to the Market Rate? QUESTION 4 $500,000, 10%, 20 year bonds sell at 102.These bonds are selling...
2) If a firm issues bonds with a contractual interest rate that is higher than the market interest rate, the bond is issued at a premium or a discount? Does this represent an addition to or reduction from the cost of borrowing?
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
Question 16 (0.5 points) If the contractual (stated) interest rate is 9% and the market (effective) interest rate is 11% on the day the bonds are sold, the bonds will sell at face value. O a discount. O a premium.
22. The interest rate investors demand for loaning funds is the a. market interest rate. b. stated rate. C. contractual interest rate. d. bond interest rate. 23. If bonds can be converted into common stock, a. they will sell at a lower price than comparable bonds without a conversion feature. b. they will carry a higher interest rate than comparable bonds without the conversion feature. C. they will be converted only if the issuer calls them in for conversion. d....
If an interest-bearing note payable is issued at a premium, then the contractual cash payment for interest is greater than interest expense. less than interest expense. equal to interest expense. based on the market rate of interest. D Question 4 2 pts A debt covenant serves to give assurance to a creditor that the debtor will have the ability to pay interest and principal at maturity serves to give assurance to the debtor that the interest rate is reasonable. allows...
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.
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