Exercise 5

Can you match the items below by entering the appropriate code letter in the space provided.

A.Bond certificateF. Payout ratio

B.Market interest rateG.Declaration date

C.Discount on bonds payableH.Legal capital

D.Face valueI.Treasury stock

E. Maturity dateJ.Cumulative dividend

_------_1.Occurs when the contractual rate of interest is less than the market rate of interest.

-------2.A legal document that indicates the face value of the bonds and other data.

------3.The rate investors demand for loaning funds to a corporation.

____ 4.Amount of principal due at the maturity date of the bond.

---------5.The time that the final payment on a bond is due from the bond issuer.

____6.The date the board of directors formally declares a dividend.

-------7.The amount that must be retained in the business for the protection of creditors.

____8.Preferred stockholders have a right to receive current and unpaid prior-year dividends before common stockholders receive any dividends.

____9.Measures the percentage of earnings distributed in the form of dividends to common stockholders.

____ 10.Corporation's own stock that has been reacquired by the corporation but not retired.