1)When the market rate of interest was 11% waverly corporation issued $1,000,000
ID: 2373173 • Letter: 1
Question
1)When the market rate of interest was 11% waverly corporation issued $1,000,000, 12% at 8-year bonds that pay interest semiannually . The selling price of this bond issue was
a) $1,052,310
b) $987, 537
c) $1,000,000
d) $720, 495
2) the periodic interest rate to be paid on the face amount of bonds, as stated in the bond indenture, is called the
a) contract rate or coupon rate
b) effective rate
c) market rate
d) straight-line rate
3) if the market rate of interest is 8%, the price of 6% bond paying interest semiannually with a face value of $100,000 will be
a) equal to $100,000
b) greater than $100,000
c) less than $100,000
d) greater than or less than $100,000, depending on the maturity date of the bonds
Explanation / Answer
A B D
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