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EverWater Company issued $5 million in bonds. The stated rate of interest was 10% and the market rate 8%. Which of the following statements is

EverWater Company issued $5 million in bonds. The stated rate of interest was 10% and the market rate 8%. Which of the following statements is true?

The bonds were issued at a premium.

Annual interest expense will exceed the company's actual cash payments for interest.

Annual interest expense will be $500,000.

EverWater Company cannot issue bonds if the market rate is lower than the stated rate.

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