Which of the Following Benefits Cannot Be Excluded as a No-Additional-Cost

question 111

Multiple Choice

Which of the following benefits cannot be excluded as a no-additional-cost service fringe benefit?

• A)Free tax return preparation from a client
• B)Complimentary dry cleaning for employees at a laundry company
• C)A car wash at an automobile dealership
• D)Free local phone service for phone company employees

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Definitions:

Required Rate

A rephrased definition: The minimum return rate required by investors to consider investing in a particular asset or project.

Coupon Interest Rate

Stated rate of interest on a bond, defined as the coupon payment divided by the par value.

Market Value

Market value is the current price at which an asset or company can be bought or sold in the marketplace, reflecting the value the market places on it.

Call Provision

Gives the issuing corporation the right to call the bonds for redemption. The call provision generally states that if the bonds are called, the company must pay the bondholders an amount greater than the par value, a call premium. Most bonds contain a call provision.