When a company issues bonds, it must sometimes issue them at a discount, while at other times it will issue them at a premium. Required: Discuss the economic circumstances that surround the situations where bonds are issued at discounts or premiums. Use examples where appropriate
Bonds may be issued at a discount (below their face value) when the interest rate carried on the bonds is less than what might be earned on other bonds with similar risk offered in the market. To attract buyers, the company must allow the buyer to pay less than the face value of the bonds to compensate for the different interest rates. The actual amount that is taken off the face value reflects the present value of the face of the bonds plus the present value of the stream of interest payments.
Bonds may be issued at a premium (above their face value) when the interest rate carried on the bonds is more than what might be earned on other bonds offered in the market. The company can require the buyer to pay more than the face value of the bonds to compensate for the different interest rates. The actual amount that is added to the face value reflects the present value of the face of the bonds plus the present value of the stream of interest payments.
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Which of the following statements concerning compensating balance agreements is not true?
A) They always reduce the amount of cash available to the borrower. B) They always involve legal restrictions on the cash received. C) They always increase the effective interest rate to the borrower. D) They must be disclosed in the financial statements' footnotes.
Frequencies' tables, part of cross-tabulation, contain raw data
Indicate whether the statement is true or false
Deal and Kennedy (1982) identify three roles that story telling play in organizations. Which one of the following is NOT one of the three?
a. Stories allow people to escape the truth of their organizational reality b. Stories help promote cohesiveness through shared meanings and understandings c. Stories locate an organization’s history and its background which helps people understand current situations d. Stores provide a picture of why things are as they are in the organization
When delivering an assertive confrontation message to an employee, you must be careful not to become defensive or reactive if the employee becomes angry or argumentative
Describe measure you can take to remain calm and focused when delivering such a message What will be an ideal response?