Match each term with the appropriate definition. Not all definitions will be used.
A. Convertible
B. Premium
C.
D.
E. Discount
F.
G. Maturity
H. Stated interest rate
I.
J. Carrying value
K. Callable
L. Market interest rate
A. A bond with the feature that allows creditors to exchange the bond for company stock.
B. When a bond is issued for a price greater than its face value.
C. Also known as the face value or par value of a bond.
D. A bond with the feature that lets creditors examine financial data and demand new loan conditions.
E. When a bond is issued for a price less than its face value.
F. The amount a company receives when it sells a bond; also known as issue price.
G. The time at which the face value of a bond must be paid to the lender.
H. The interest rate printed on the bond certificate.
I. A bond feature that changes the interest rate on the bond with market conditions.
J. Is multiplied by the market interest rate to calculate the (effective) interest expense on a bond.
K. A bond with the feature that allows the borrowing company to pay off a bond whenever it wishes.
L. Rate of interest that investors demand from a bond.
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