1. How are the costs of issuing bonds treated?

Select one:

a. They are expensed on the income statement

b. They are a decrease to the paid in capital account

c. They are listed as a liability and amortized over the life of the bond

d. They are listed as an asset and amortized over the life of the bond

2. Which ratio is used to measure the Default Risk of a company?

Select one:

a. Debt to Equity

b. Operating Profit Margin

c. Return on Equity

d. Current Ratio