Business & Finance

Bonds owned by investors whose names and addresses are recorded by the issuing company and for which interest payments are made with checks to the bondholders, are called:

Callable bonds

Serial bonds

Registered bonds

Coupon bonds

 

22. A company issues 9%, 20-year bonds with a par value of $750,000. The current market rate is 9%. The amount of interest owed to the bondholders for each semiannual interest payment is.

$0

$33,750

$67,500

$750,000

$1,550,000

 

23. A company borrowed $50,000 cash from the bank and signed a 6-year note at 7%. The present value factor for an annuity for 6 years at 7% is 4.7665. The annual annuity payments equal $10,490. The present value of the loan is:

$10,490

$11,004

$50,000

$52,450

 

24. Sinking fund bonds:

Require the issuer to set aside assets in order retire the bonds at maturity

Require equal payments of both principal and interest over the life of the bond issue

Decline in value over time

Are registered bonds

 

25. A dividend preference for preferred stock means that:

Preferred stockholders receive their dividends before common shareholders

Preferred shareholders are guaranteed dividends

Dividends are paid quarterly

Preferred stockholders prefer dividends more than common stockholders

Dividends must be declared on preferred stock

 

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