Zencorp Issues a Bond with an Initial Amount of $8000

question 21

Multiple Choice

Zencorp issues a bond with an initial amount of $8000 and a maturity date of 12 years at an interest rate of 7% per annum. Given this scenario, which of the following statements is true?

• A) Zencorp is due to repay $8000 by the end of 12 years.
• B) Zencorp will not be charged the required interest before 12 years.
• C) Zencorp will not be allowed to purchase any more bonds for the next 12 years.
• D) Zencorp is due to receive double the initial amount at the end of the maturity date.

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Definitions:

Mandatory Dividend Provisions

Rules or clauses within a company's charter or bylaws that require the company to pay dividends to its shareholders under certain conditions.

Corporate Laws

Regulations and legal principles dealing with the formation, operation, and dissolution of corporations.

Legal

Pertains to the system of rules that are created and enforced through social or governmental institutions to regulate behavior.

Corporations

Legal entities formed by individuals, shareholders, or stakeholders, with rights and duties distinct from those of its members, and recognized as such by law.