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1. A disadvantage of bonds is: A. Bonds require payment of periodic interest. B. Bonds require payment of par value at maturity. C. Bonds can

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1. A disadvantage of bonds is: A. Bonds require payment of periodic interest. B. Bonds require payment of par value at maturity. C. Bonds can decrease return on equity D. Bond payments can be burdensome when income and cash flow are low E. All of the choices are correct. 2. Bonds can be issued A. At par. B. At a premium. C. At a discount. D. Between interest payment dates. E. All of the choices are correct 3. A bond sells at a discount when the: A. Contract rate is above the market rate. B. Contract rate is equal to the market rate. C. Contract rate is below the market rate. D. Bond has a short-term life. E. Bond pays interest only once a year. 4. Bonds that give the issuer (corporation) an option of retiring them before they mature are A. Registered bonds. 8. Sinking fund bonds. C. Serial bonds. D. Callable bonds. E. Debentures. 5, Morgan Company issues 9%, 20-year bonds with a par value of $750,000 that pay interest semiannually. The amount of cash paid by Morgan Company to the bondholders for each semiannual interest payment is: A. $375,000. B. $67,500. C. $33,750. D. $60,000. E. $30,000

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