The Cases Company Issues $800 000 of 7%, 10- Year

question 81

Multiple Choice

The Cases Company issues $800 000 of 7%, 10- year debentures on 31 March 2013. The debenture pays interest on 31 March and 30 September. Which of the following statements is TRUE?

• A)If the market rate of interest is 8%, the debentures will issue at par.
• B)If the market rate of interest is 8%, the debentures will issue at a discount.
• C)If the market rate of interest is 8%, the debentures will issue above par.
• D)If the market rate of interest is 8%, the debentures will issue at a premium.

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Definitions:

Acidic Chyme

The partially digested, acidic fluid that passes from the stomach to the small intestine, consisting of gastric juices and partly digested food.

Gastrin

A hormone that stimulates the secretion of gastric acid by the stomach's parietal cells for digestion.

Hepatopancreatic Ampulla

Dilation within the major duodenal papilla that normally receives both the common bile duct and the main pancreatic duct.

Pancreatic Duct

Excretory duct of the pancreas that extends through the gland from tail to head, where it empties into the duodenum at the greater duodenal papilla.