7) The market price of a bond is equal to: a) The present value of future dividends b) The present value of retained earnings c) The present value of future interest payments and the present value of the bonds' appreciation. d) The present value of future interest payments and the present value of the agreed principal.

7) The market price of a bond is equal to: a) The present value of future dividends b) The present value of retained earnings c) The present value of future interest payments and the present value of the bonds' appreciation. d) The present value of future interest payments and the present value of the agreed principal.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 10MC: The effective-interest method of bond amortization finds the difference between the ________ times...

See similar textbooks

Similar questions

The effective-interest method of bond amortization finds the difference between the ________ times the ________ and the ________ times the ________. A. stated interest rate, principal, stated interest rate, carrying value B. stated interest rate, principal, market interest rate, carrying value C. stated interest rate, carrying value, market interest rate, principal D. market interest rate, carrying value, market interest rate, principal
The market price of a bond issued at a discount is the present value of its principal amount at the market (effective) rate of interest a. Less the present value of all future interest payments at the rate of interest stated on the bond. b. Plus the present value of all future interest payments at the rate of interest stated on the bond. c. Plus the present value of all future interest payments at the market (effective) rate of interest. d. Less the present value of all future interest payments at the market (effective) rate of interest.
The price of a bond is the present value of promised future payments to the bondholder. A) True B) False
In theory, the proceeds from the sale of a bond will equal to the face amount of the bond. present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond plus transaction costs. face amount of the bond plus the present value of the interest payments during the life of the bond. present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond.
How do we calculate the issue price of bonds? Is it equal to the present value of the principal? Explain.
A bond's yield to maturity is the annualized percentage return of both interest and capital gains or losses if the bond were held until it matured. Select one: True False
In theory (disregarding any other marketplace variables), the proceeds from the sale of a bond will be equal to The face amount of the bond plus the present value of the interest payments made during the life of the bond. The sum of the face amount of the bond and the periodic interest payments The face amount of the bond The present value of the bond maturity value plus the present value of the interest payments to be made during the life of the bond.
The price of a bond is equal to the sum of the interest payments and the face amount of the bonds. True False
A bond issue sold at a premium is valued on the statement of financial position at the a. maturity value. b. maturity value plus the unamortized portion of the premium. c. cost at the date of investment. d. maturity value less the unamortized portion of the premium.
. Distinguish between the following values relative to bonds payable: a. Maturity value. b. Face value. c. Market (fair) value. d. Par value.
Please see attached. Definitions: Yield to maturity (YTM) is the return the bond holder receives on the bond if held to maturity.
When determining how to compute the present value of a bond, the buyer computes the ________. Group of answer choices present value of the interest discounted at the market rate and the present value of the par value discounted at the stated rate future value of the par value and interest discounted at the stated interest rate present value of the par value discounted at the market rate and the present value of the interest discounted at the stated rate present value of the par value and the present value of the interest discounted at the market interest rate