21 The par value of a bond is theOa) value of the bond at maturity minus the price of the bond at purchase.O b) price of the bond at purchase minus the face value of the bond.Oc) value of the bond at maturity, or the amount due at repayment.O d) price of the bond at purchase.e) value of the bond at maturity plus the price of the bond at purchase.

Answered: The par value of a bond is the

Business

Finance

The par value of a bond is the

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3MC: The principal of a bond is ________. A. the person who sold the bond for the company B. the person...

See similar textbooks

Related questions

Q: A man paid 10% down payment of P1,500,000 for a house and lot this month of January. The rate of int...

A: Here, Interest Rate is 15% Compounding Period (C) is Semi- Annual i.e 2 Payment Period (K) is Monthl...

Q: Jie purchased a computer priced at $891.06, financing it by paying $60.38 on the date of purchase, a...

A: Solution:- We know, when an asset is purchased, it may be possible that the amount is paid in equal...

Q: Preferred stock generally has a lower after-tax cost than debt to the corporation. True or False Tru...

A: Solution:- We know, preferred stock is hybrid form of common stock and debt. They get periodic divid...

Q: has issued 10-year bonds, with a face value of $1,000,000, in $1,000 units. Interest at 8% is paid q...

A: The price of bond is present value of coupon payment and present value of par value of bond to be re...

Q: Periodic Payment Interval Term Interest Rate Conversion Period Payment $1700 6 months 17 years 2% an...

A: Future value of the ordinary annuity that are deposited at the end of period will includes the amoun...

Q: You are an investor who is interested in purchasing AC shares which is currently trading at a price ...

A: Growth rate (g) = 3% Required return (r) = 8% Expected dividend (D1) = P25

Q: nominal annual interest rate on 6-month USD Treasury Bill is 4.50%. The spot rate of the Euro is $3....

A: If the interest parity hold than spot rate and forward must be in equilibrium with interest rates of...

Q: ractice 1 Your friend is celebrating her 35th birthday today and wants to start saving for her anti...

A: There is need of proper planning for retirement and if you plan at proper time and proper way than t...

Q: Sally decides to buy a Treasury note futures contract for delivery of $100,000 face amount in Decemb...

A: Here, Buy a Treasury Note at 110'8.5 Note: T notes are quoted in 32nds Therefore, Value of Treasury ...

Q: Explain the term receivable float and the ways to avoid receivable float loss. Provide a hypothetica...

A: Receivable float means Float is the time gap in the receivables management a) Period of credit off...

Q: 4. Matt invested 10,000 in an account that was paying 3.5% annual interest. Determine his balance af...

A: Solution:- When some amount of money is invested somewhere, it earns interest on it. The amount at m...

Q: To purchase a specialty guitar for his band, for the last three years JJ Morrison has made payments ...

A: Monthly saving is $92 Time period is 3 years Interest rate is 4.87% compounded monthly Interest rate...

Q: National Inc. has been hit hard due to pandemic. The company’s analysts predict that earnings and d...

A: We will use the dividend discount model here. We have to find P3.

Q: define if operating, investing or financing expense Increase in Bonds Payable A decrease in the cur...

A: Statement of cash flows is one of the financial statement which shows all cash inflows and cash outf...

Q: Referring to the table below, calculate the Net Present Value (NPV) and Profitability Index (PI). Th...

A: Net present value is the sum of all the discounted cash flows during the tenure of the investment. O...

Q: Bulldogs Inc., a corporation with a 40% tax rate, plans to issue P500,000 of 5% preferred share in e...

A: Weighted average cost of capital = cost of debt * (1-tax rate) * weight of debt in capital + cost of...

Q: r payoff be? What will your profit be?

A: Pay off refers to the gain or loss that buyers make from trading a stock option. There are three var...

Q: A person buys a piece of lot for P110,000 down payment and 10 deferred semi-annual payments of P 8,0...

A: Present Value The present value is the value of cash flow stream or the fixed lump sum amount at ti...

Q: Bulldogs Inc. has Dog bonds outstanding with P1,500 face value and 8 years is remaining before its m...

A: Given: Particulars Amount Face value(FV) 1500 Years 8 Current price 1750 Coupon rate 10% ...

Q: The nominal annual interest rate on 6-month USD Treasury Bill is 4.50%. The spot rate of the Euro is...

A: INTEREST RATE PARITY: If interest rate parity holds good then inte...

Q: A car loan of $28,641.62 is to be repaid with end-of-month payments of $582.15. If interest is 4% co...

A: EMI stands for equated monthly instalments. It is a series of payment provided by the borrower to a ...

Q: In regarding the Asset backed securities & Mortgage backed securities: 1- What is the utility using ...

A: Asset-backed securities are financial instruments that are backed by income-producing assets such a...

Q: You are looking at a project analysis, which yields a net present value of $ 18,829. The project ana...

A: Working capital involves for the amount of cash put for maintain short-term assets as they are requi...

Q: A construction company agreed to lease payments of $622.77 on construction equipment to be made at t...

A: a) The Value of original lease Contract: Payment (PNT)=$ 622.77 (payment is made at every 3 months...

Q: In the spot market, P1 = 100 USD, 1 USD = 0.95 Yen, and 1 Yen = 5.50 British Pound. What is the exch...

A: Exchanges rates are those rates in which currency of one country can be exchanged with another count...

Q: Star. An advertisement of an investment firm states that if you invest P500 in their firm today you...

A: Investment (PV) = P500 Future value (FV) = P2000 Period = 10 Years Quarterly period (n) = 10*4 = 40 ...

Q: 6. You are thinking of buying a bond from Bluestone Corporation. You know that this bond is long ter...

A: "Hi, Thanks for the Question. Since you asked multiple questions, we will answer first question for ...

Q: The finance charge for this billing cycle is The account balance on the next billing is

A: A credit card is a type of payment card which is issued to the user by banks or financial institutio...

Q: You want to be able to travel and withdraw $3750 at the end of every month during your yearlong trip...

A: Monthly withdrawal (M) = $3750 Number of withdrawals (n) = 1 year = 12 months r = 6.24% per annum = ...

Q: Bulldogs Inc. has a P1,200 face value bond with 8 years until maturity. The bond possesses a charact...

A: We need to use RATE formula in excel to calculate yield to maturity. The formula is =RATE(NPER,PMT,-...

Q: Suppose that a stock is priced at $90. Given that a potential buyer has a required rate of return on...

A: As per the guidelines we are allowed to solve the first question only in case of multiple questions....

Q: Two types of heat exchangers (y and z) would like to compare the cost of use in a particular chemica...

A: EUAC is uniform equivalent annual cost which is equivalent all cost including the cost of acquisitio...

Q: The Black-Scholes model is used by Bulldogs Inc. to value call options on the stock of National Inc....

A: Call or put options are type of future contracts which are entered in today's date but which will be...

Q: Yield to maturity (YTM) is the rate of return expected from a bond held until its maturity date. How...

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...

Q: The formula of which of the following considers the percentage change in price? a. Total expected yi...

A: Percentage change in price Percentage change in price involves two prices of two different periods. ...

Q: To purchase a specialty guitar for his band, for the last three years JJ Morrison has made payments ...

A: Solution:- When an equal amount is deposited each period at end of each period, it is called ordinar...

Q: a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. Wha...

A: A bond is defined as the financial instrument that is used to raise capital from the market at a sta...

Q: Some in the academic world contend that corporate risk management is a zero-sum game. Discuss.

A: Corporate risk management refers to all of a company's efforts to minimise financial losses. Risk ma...

Q: GRAPH SETTINGS Reset Country-X Initial Value 1,000.00 Value (thousands of dollars) ($50 – $10,000) [...

A: Country X produces - $2000 per yr Country y Produces - $2200 per yr Growth – 7.2% Future Value = ...

Q: A construction company agreed to lease payments of S622.77 on construction equipment to be made at t...

A: Hi, since you have submitted a question with multiple sub-parts, we will answer the first three as p...

Q: Bulldogs Inc. has sales of P4,500,000, variable costs equal 75% of sales, and a fixed interest costs...

A: Sales = P4,500,000 Variable cost = 75% Contribution = Sales*(1-Variable cost ratio) ...

Q: The weights that Genghis should apply in estimating Bulldogs Inc.’s cost of capital for debt and equ...

A: Weighted average cost of capital (WACC) refers to the combined cost of company's capital from all th...

Q: 13. An all-equity firm currently has 1,000,000 shares outstanding with a market price of $10. The fi...

A: Value of an unlevered firm When a firm has both equity and debt in its capital structure, it is know...

Q: Assuming the mortgage is a 20-year adjustable rate mortgage, use the given information to find the m...

A: Annuity A series of equal payments at equal interval over a specified period of time is considered a...

Q: payment

A: Payment per month refers to the amount, the borrower pays on monthly basis for the repayment of the ...

Q: Question 7 Given the following information for three publically traded comparable companies, estimat...

A: Unlevered beta When a company has both equity and debt in its capital structure, its beta is termed ...

Q: ny has a financial break-even point at P163,500. How much is the total preferred dividends to be dis...

A: Financial break even point is a point where earning per share of the entity is equal to zero.

Q: An amortization of a debt is in the form of a gradient series of $6,000 in the first year, $5,000 in...

A: When a debt is paid in series of instalments involving principal and interest is called amortization...

Q: We have a question about CAPM that we haven't found an accurate answer to The question is: can the b...

A: The capital asset pricing model (CAPM) is a simplified representation of how financial markets price...

Q: the ROS On January 1, 2020 P1,000,000. The useful life is expected to be 10 years. On July 1, 2025, ...

A: The wear and tear of an asset during the useful life of an asset is known as depreciation. The depre...

Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

The par value of a bond is the
Oa) value of the bond at maturity minus the price of the bond at purchase.
O b) price of the bond at purchase minus the face value of the bond.
Oc) value of the bond at maturity, or the amount due at repayment.
O d) price of the bond at purchase.
e) value of the bond at maturity plus the price of the bond at purchase.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

The principal of a bond is ________. A. the person who sold the bond for the company B. the person who bought the bond C. the interest rate printed on the front of the bond D. the face amount of the bond that will be paid back at maturity
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
Describe and differentiate between a bonds (a) current yield and (b) yield to maturity. Why are these yield measures important to the bond investor? Find the yield to maturity of a 20-year, 9 percent, 1,000 par value bond trading at a price of 850. Whats the current yield on this bond?
When a bond sells at a discount, the carrying value ________ after each amortization entry. A. increases B. decreases C. stays the same D. cannot be determined
The price of a bond is equal to the sum of the interest payments and the face amount of the bonds. True False
In computing the carrying amount of a bond, unamortized _______ is added to the face value of the bond. If a bond sells at a _____________, an amount more than the face value of the bond is received on the date of issuance. If a bond sells at a ____________, an amount less than the face value of the bond is received on the date of issuance.
How do you calculate the price of a bond? It is: The sum of the present value of the face amount and the value of credit default swaps The sum of the future value of annuity of interest and the fair value of its inventory The sum of the present value of annuity of interest and the face amount of the bond The sum of the current value of the issuing corporation of accounts receivables None of the above.
Which of the following is TRUE about a bond's face (par) value? Select one: a. the face value of a bond is the same as the bond's price b. the par value of a bond is the interest payment c. the face value of a bond changes when yields change d. the value of a bond will always be equal to par at maturity.
The amount loaned when a bond is issued is a. the principal. b. the dividend. c. its maturity. d. its par value.
Please see attached. Definitions: Yield to maturity (YTM) is the return the bond holder receives on the bond if held to maturity.
Which of the following statements is not correct? a) The export value of the bond; the value the investor pays when buying bonds b) Nominal value of the bond; is the value written on the bond c) Another reason for the difference in bond market prices is the dividend paid to bonds. d) Periodic interest amounts on bonds are calculated at nominal value. e) Market value of a bond is equal to the present value of the interest to be paid by the bond and the principal amount to be paid at the end of maturity. ------------------ What is the market value of İdil Gıda's bond with a nominal value of 15000 USD, maturity of 3 years and 30% annual interest payment, assuming that the desired yield rate is 36%? a) 12500b) 13494c) 9000d) 5456e) 7594 ============ What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5 years and an annual interest payment of 25%, when the desired rate of return is 25%? a) 18000b) 15000c) 12000d) 16000e)…
Please explain the terms associated with the bonds, namely, corporate bond, municipal bond , treasury bill, par value, coupon rate, coupon payment, time to maturity, prevalent interest rate, market value and yield to maturity (YTM).