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True or false: 1. The coupon rate of a bond typically equals the yield (market) rate. 2. For debt issued at a discount: interest expense
True or false:
1. The coupon rate of a bond typically equals the yield (market) rate.
2. For debt issued at a discount: interest expense reported on the income statement equals cash interest payment less amortization of the discount.
3. Market prices of bonds after issuance fluctuate because bonds compete with other investments and become more or less attractive based on the interest rates of competing securities and the financial condition of the borrowing company.
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