Which of the Following Involves Payment of Part of the Face

question 58

Multiple Choice

Which of the following involves payment of part of the face value or principal prior to maturity?

• A) fixed-payment loan
• B) coupon bond
• C) discount bond
• D) simple loan

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Definitions:

Cumulative Preferred Stock

A type of preferred stock where missed dividend payments are accumulated and must be paid before any dividends can be issued on other stock classes.

Liability

A financial obligation or debt owed by a company to another entity, to be settled through the transfer of assets or services.

Date of Declaration

The date on which a company announces its intention to pay a dividend or issue a corporate action to its shareholders.

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional shares.