?How is the issue price for a bond determined? What are the three alternative states of the bond issue price?
What will be an ideal response?
The issue price for a bond is determined by taking the present value associated with the principle and interest portions of the bond using the effective interest rate.Bonds can be issued at par, discount, or premium. If a bond is issued at par, the stated rate and the effective interest rate are the same. If the bond is issued at a discount, it is being issued lower than face value. This occurs when the stated rate on the bond is lower than an alternative investment on the market. In order to entice investors to purchase the bond it is offered at a discount. If a bond is issued at a premium, it is being issued at more than face value. This occurs when the stated interest rate is higher than the current market rate.
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The lower-of-cost-or-market method of accounting for inventories follows the convention of
a. full disclosure. b. materiality. c. conservatism. d. cost-benefit.
In an investment center, the manager has the responsibility for and the authority to make decisions that affect:
A) the assets invested in the center, but not costs and revenues B) costs and assets invested in the center, but not revenues C) both costs and revenues for the department or division D) not only costs and revenues, but also assets invested in the center
Define gazelle, and discuss some ways that gazelles impact the economy.
What will be an ideal response?
Categorizing age variables as "young," "middle-aged," and "elderly" is an example of:
a. counting b. ordering c. value adding d. binning e. categorizing