Your Company Is Planning to Issue $1,000 Bonds with a Stated

question 246

Multiple Choice

Your company is planning to issue $1,000 bonds with a stated interest rate of 7% and a maturity date of July 15,2022.If interest rates fall in the economy so that similar financial investments pay 5%,your company will:

• A)not be able to issue the bonds because no one will buy them.
• B)receive a higher issue price as buyers compete for the bonds.
• C)have to accept a lower issue price to attract buyers.
• D)have to reprint the bond certificates to change stated interest rate to 5%.

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Definitions:

Law Students

Individuals engaged in the study of law at a university or law school, working towards becoming legal professionals.

Associate Attorneys

are lawyers who are employed by a law firm but do not hold an ownership interest as partners do, often working under the direction of partners.

Partners

Individuals who share ownership and responsibilities in a business or law practice.

Profits

The financial gains obtained by a business after subtracting all expenses incurred.