Homework Answers
| Bond sinking fund is setup for retirement of bonds payable or to payoff debt. Sinking fund helps for setting aside a pool of money to pay off debt on maturity. |
| Hence answer is Option a) |
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A bond sinking fund is cash or other assets periodically put aside specifically to: a. retire...
Gordon Co., having recently issued a $1,000,000 bond, is committed to make annual sinking fund deposits...
Gordon Co., having recently issued a $1,000,000 bond, is committed to make annual sinking fund deposits of $75,000. The deposits are made on the last day of each year and yield a return of 6%. Will the fund at the end of 10 years be sufficient to retire the bonds? If not, what will the deficiency be? LakeFront Co. is considering investing in a new dock that will cost $280,000. The company expects to use the dock for 5 years, after which it will...
Chapter 9 Homework Assignment 1) A written promise to repay a loan principal plus interest at...
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9. More on types of bonds You can distinguish the various types of bonds by their...
9. More on types of bonds You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Description Type of Bond These bonds are traded in the bond markets based orn investors' belief that the issuer will not default on the repayment. These bonds have no collateral and usually offer higher yields. These bonds have a claim...
More on types of bonds 1- You can distinguish the various types of bonds by their...
More on types of bonds
1- You can distinguish the various types of
bonds by their terms of the contract, pledge of collateral, and so
on. Identify the type of bond based on each description given in
the table that follows: (Types of Bonds: Junior Mortgage
Bonds/ Debentures/ Subordinate Debentures/ Senior Mortgage
Bonds)
Description
Type of Bond
a) These bonds are collateralized securities with first claims
in the event of bankruptcy.
?
b) These bonds are not backed by any...
Term Answer Description Coupon A. This term is used to define the provision which allows the...
Term Answer Description Coupon A. This term is used to define the provision which allows the bond issuer to settle the payments towards the bond before the maturity. 0 B. Equipment Trust Certificate Sinking Fund 0 C. This term is used to state the quoted value of a bond but does not include the value of any accrued interest that bondholders would eam. This term defines the number of shares of common stock that a bondholder will receive when they...
Presented below are four independent situations. (a) on March 1, 2018, Swifty Co, issued at 102...
Presented below are four independent situations. (a) on March 1, 2018, Swifty Co, issued at 102 plus accrued interest $4,140,000, 8% bonds. The bonds are dated January 1, 2018, and pay interest semiannually on July 1 and January 1. In addition, Swifty Co. incurred $29,000 of bond issuance costs. Compute the net amount of cash received by Swifty Co, as a result of the issuance of these bonds. (Round present value factor calculations to 5 decimal places, e.. 1.25124 and...
Asset based lending is commonly used to finance leveraged buyouts. Which of the following is not...
Asset based lending is commonly used to finance leveraged buyouts. Which of the following is not true about such financing? The borrower generally pledges tangible assets as collateral. Lenders look at the target firm’s assets as their primary protection. Bank loans are secured frequently by receivables and inventory. Loans maturing in more than one year are often referred to as term loans. The target firm’s most liquid assets generally secure longer-term loans. Security provisions and protective covenants are included in...
You can distinguish the various types of bonds by their terms of contract, pledge of collateral,...
You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true? BBB bonds usually have the lowest yields in the bond markets. U.S. government bonds usually have the lowest yields in the bond markets. The Export Development Canada (EDC) announced...
Terry Co. Balance Sheet As of 12/31/Year 3 Year 3 Assets Year 2 Current Assets Cash...
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The following information of Fortune Co. is given: Balance Sheets: Sm Sm Assets Current assets Fixed...
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9. More on types of bonds You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Description Type of Bond These bonds are traded in the bond markets based orn investors' belief that the issuer will not default on the repayment. These bonds have no collateral and usually offer higher yields. These bonds have a claim...
More on types of bonds
1- You can distinguish the various types of
bonds by their terms of the contract, pledge of collateral, and so
on. Identify the type of bond based on each description given in
the table that follows: (Types of Bonds: Junior Mortgage
Bonds/ Debentures/ Subordinate Debentures/ Senior Mortgage
Bonds)
Description
Type of Bond
a) These bonds are collateralized securities with first claims
in the event of bankruptcy.
?
b) These bonds are not backed by any...
Term Answer Description Coupon A. This term is used to define the provision which allows the bond issuer to settle the payments towards the bond before the maturity. 0 B. Equipment Trust Certificate Sinking Fund 0 C. This term is used to state the quoted value of a bond but does not include the value of any accrued interest that bondholders would eam. This term defines the number of shares of common stock that a bondholder will receive when they...
Presented below are four independent situations. (a) on March 1, 2018, Swifty Co, issued at 102 plus accrued interest $4,140,000, 8% bonds. The bonds are dated January 1, 2018, and pay interest semiannually on July 1 and January 1. In addition, Swifty Co. incurred $29,000 of bond issuance costs. Compute the net amount of cash received by Swifty Co, as a result of the issuance of these bonds. (Round present value factor calculations to 5 decimal places, e.. 1.25124 and...
You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows: Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true? BBB bonds usually have the lowest yields in the bond markets. U.S. government bonds usually have the lowest yields in the bond markets. The Export Development Canada (EDC) announced...
Terry Co. Balance Sheet As of 12/31/Year 3 Year 3 Assets Year 2 Current Assets Cash $526.500 $729.000 ($40.500) S972 000 S80.750 S101,250 $2,349,000 $405.000 SEBA, 500 (S202,500) $1.134.000 $121,500 $81.000 $2,227.500 5486,000 $81.000 $121,500 $101.250 S40,500 $830,250 $324.000 $41,420 $365.420 $324.000 $41,420 $365,420 Allowance for Bad Debts Inventory Prepaid Insurance Prepaid Rent Total Current Assets Long-term investments Loans to other businesses Expansion Fund Total Long-term Investments PPE Land Building Equipment Accumulated Depreciation Total PPE Intangible Assets Patents, net Total...
The following information of Fortune Co. is given: Balance Sheets: Sm Sm Assets Current assets Fixed assets 10 90 Liabilities and Equity Current liabilities Non-current liabilities Equity Total equity and liabilities 20 30 50 100 Total assets 100 The net income of this financial year is S4 million. The dividends of Fortune Co. are $2 million in total. The current stock price is $6.5 per share and 30 million shares are outstanding, Now, the board directors of Fortune Co. are...
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