1. When a bond sells at a premium:

The contract rate is above the market rate.

The contract rate is equal to the market rate.

The contract rate is below the market rate.

It means that the bond is a zero coupon bond.

The bond pays no interest.

2. A company paid $37,800 plus a broker's fee of $525 toacquire 8% bonds with a $40,000 maturity value. The company intendsto hold the bonds to maturity. The cash proceeds the company willreceive when the bonds mature equal:

$37,800.

$38,325.

$40,000.

$40,525.

$43,200.

3. Which of the following is true of a stockdividend?

It is a liability on the balance sheet.

The decision to declare a stock dividend resides with theshareholders.

Transfers a portion of equity from retained earnings to a cashreserve account.

Does not affect total equity, but transfer amounts between thecomponents of equity.

Reduces a corporation's assets and stockholders' equity.

4. The following data has been collected about KellerCompany's stockholders' equity accounts:

Common stock $10 parvalue 20,000 shares authorized and 10,000 shares issued, 9,000shares outstanding	$100,000
Paid-in capital inexcess of par value, common stock	50,000
Retainedearnings	25,000
Treasurystock	11,500

Assuming the treasury shares were all purchased at the sameprice, the cost per share of the treasury stock is:

$1.15.

$1.28.

$11.50.

$10.50.

$10.00.