Given the number of times interest charges are earned measure in the table below

Question

Given the number of times interest charges are earned measure in the table below, choose the company that would be least likely to default on its interest payments. Given the relationships between the contract and market rates shown in the table below, circle the correct answer in the third column regarding at what value each bond will sell. Influence is the basis for deciding how to account for equity investments. What is the basis for deciding how to account for debt investments? control initiative pressure intent

Explanation / Answer

8) The correct answer is option A.

Because the number of times the interest charges are earned is more for MIZ.

9)

a. Since the market rate is more the bond will be issued at discount.

b. Since both market rate and contract rate are equal the bond will be issued at face value.

C. Since the market value is lower than the contract price the bond will be issued at premium.

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