If a Person Starting a Business Had an Investment of a Building

question 86

Multiple Choice

If a person starting a business had an investment of a building, valued at $300,000 with an $180,000 outstanding mortgage, the effect would be to:

• A)increase stockholders' equity by $120,000.
• B)increase assets by $120,000.
• C)increase assets by $180,000.
• D)increase stockholders' equity by $300,000.

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Definitions:

Yield To Maturity

The total return anticipated on a bond if it is held until the date of its maturity, including all interest and principal repayments.

Semi-Annually

Occurring or calculated twice a year, often used in the context of interest payments or other financial assessments.

Face Value

The nominal or stated value of a bond, share of stock, or other financial instruments, typically used as a reference for calculating interest, dividends, or premiums.

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) over the bond's life, with the principal amount repaid at maturity.