Explain this statement: When interest rates rise, bond prices fall; when interest rates fall, bond prices rise. Make sure you explain what interest rates are.

ABC Corp authorized 1,000,000 shares of its $5 par value common stock. The following transactions then occurred. How would each impact the firms equity section? What reason would the firm have for purchasing shares for the Treasury? How many shares can still be issued? What is the EPS?

• January 2, issue 100,000 shares at $20 each
• March 1, issue 50,000 shares at $22 each
• June 1, purchase 25,000 shares for the Treasury at $15 each
• December 30, report NI for the year of $500,000
• December 31, declare a cash dividend of $1 per share

These interactions count as class participation active and meaningful participation may be counted as extra credit. The prompts are part of your graded work you are required to post answers to 5 chapter prompts over the course of this class.