Take Test: ACC 211 Test 14 Remaining Time: 16 minutes, 47 seconds s Question Com
ID: 2593900 • Letter: T
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Take Test: ACC 211 Test 14 Remaining Time: 16 minutes, 47 seconds s Question Completion Status: QUESTION 3 A bond issuer assumes an obligation to the purchasers to: make periodic interest payments until maturity and repay the principal at maturity. OB. redeem any bonds at face value on demand from their owners D C pay no cash or stock dividends while the bonds are outstanding. 0 D. All of the above answers are correct. QUESTION 4 A bond issued at a discount indicates that at the date of isste: o A. its contract rate was lower than the prevailing market rate of interest on similar bonds. Bthe bonds are noninterest-bearing. C. its contract rate was higher than the prevailing market rate of interest on similar bonds. D, the bonds were issued at a price greater than their face value. QUESTIONS Bonds differ from stock in all the following ways exceas that: A. dividends must be paid each perlod, interest on bonds does not. to saue all answers Save All AnswersExplanation / Answer
Answer3: Yes, option (d) is correct. A bond issuer has obligation make periodic interest payments until maturity and repay the principal at maturity. Interest rate will be fixed.A bond is a written promise to repay borrowed money with interest at some future date usually after date of issue. A bond is a form of loan, the holder of the bond is lender, issuer of bond is borrower and the coupon is interest.
Answer4: Yes, option (a) is correct. A bond issued at a discount indicates that at the date of issue its contract rate was lower than the prevailing market rate of interest on similar bonds. A bond issued at discount means its price is less than its face value and there is inverse relationship between price and interest of bond. Hence if price is less in market then its interest rate will be higher than contract rate.
Answer5: Since all options are not visible. second one option i.e. (b) is correct between (a) and (b). Bonds differ from stocks. Bonds are debt and stock is ownership. Bonds pays interest while stock pays dividend if declared.Stockholders have equity stake in the company while bondholders have credtors stake in the company. Bondholders have priority over stockholder. Also bond has a maturity period while stock remain outstanding indefinately.
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