Question
If a bonds stated interest rate is 4% and the market interest rate is 6%, the bond is likely to be issued at A. par.
If a bond’s stated interest rate is 4% and the market interest rate is 6%, the bond is likely to be issued at
A. par.
B. a discount.
C. maturity value.
C. a premium.
Step by Step Solution
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Step: 1
This will be a Bond Discount Bond discount is the amount by which the market price of a bond is lower than its principal amount due at maturity This amount called its par value is often 1000 The prima...
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Accounting concepts and applications
Authors: Albrecht Stice, Stice Swain
11th Edition
978-0538750196, 538745487, 538750197, 978-0538745482
