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The Issue Price of the Stock Usually Is Equal to the Par

question 72

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The issue price of the stock usually is equal to the par value of the stock.


Definitions:

Rate of Interest

The interest rate a borrower is charged for loaned money from a lender.

Present Value

The monetary value in present terms of a sum of money to be received later or a flow of cash, using a defined return rate.

Compounding

Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.

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