Bonds issued by BB&C Communications that have a coupon rate of interest equal to 10 percent currently have a yield to maturity (YTM) equal to 8 percent. Based on this information, it is understood that BB&C's bonds must currently be selling at a premium in the financial markets.?
Answer the following statement true (T) or false (F)
True
When the market yield is less than the coupon rate of interest, the bond sells for greater than its par value, or at a premium. See 6-5: Interest Rates and Bond Values
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Sofranko Corporation purchased 8,000 shares of Bussey Corporation common stock for $80 per share on January 1, 2014. Bussey reported net income of $240,000 for 2014 and paid dividends of $84,000 during 2014. As of December 31, 2014, the market value of Bussey Corporation common stock was $80 per share. Assuming the shares owned by Sofranko represent 10 percent of the total outstanding stock of
Bussey, the entry to record the receipt of dividend income in Sofranko Corporation's books is: A) Cash 16,000 Dividend Income 16,000 B) Cash 8,000 Dividend Income 8,000 C) Cash 8,400 Dividend Income 8,400 D) Cash 24,000 Dividend Income 24,000
Cotton Corp. currently makes 10,000 subcomponents a year in one of its factories. The unit costs to produce are: Per unitDirect materials $32.50Direct labor 13.00Variable manufacturing overhead 19.50Fixed manufacturing overhead 26.00Total unit cost $91.00An outside supplier has offered to provide Cotton Corp. with the 10,000 subcomponents at an $84.50 per unit price. Fixed overhead is not avoidable. What is the maximum price Cotton Corp. should pay the outside supplier?
A. $65.00 B. $84.50 C. $58.50 D. $91.00
Martin wins a car in a lottery. As he already owns a car, he decides to sell the new one to his friend Ted. While driving the car, Ted gets into a head-on collision with another car
Due to a defective Supplemental Restraint System (SRS) in the vehicle, the airbag does not deploy and Ted is seriously injured. Which of the following statements is true of this situation? A) Martin can be held strictly liable because he sold the car to Ted. B) The car manufacturer cannot be held strictly liable as Ted had not bought the car from it. C) Martin cannot be held strictly liable as the sale of the car counts as a casual transaction. D) The driver of the other car can be held strictly liable due to his or her involvement in the accident.
Peterson, Inc. issued 4,000 shares of preferred stock for $240,000. The stock has a par value of $60 per share. Prepare the journal entry for this transaction
What will be an ideal response