If a Corporate Bond with a Face Value of $2,000

question 58

Multiple Choice

If a corporate bond with a face value of $2,000 pays yearly coupon payments of $50, what is the coupon rate?

• A)2.5%
• B)4%
• C)25%
• D)40%

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Definitions:

Variable Costing

An accounting method in which costs that vary directly with production volume (such as materials and labor) are included in product costs, whereas fixed costs are not.

Absorption Costing

A system of accounting that entails adding all expenses incurred in production, including direct materials, direct labor, and both variable and fixed overheads, into the cost calculation of a product.

Product Cost

The total cost of manufacturing or purchasing a product, including raw materials, labor, and overhead expenses.

Per Unit

A term referring to expressing or measuring amounts for each single item or instance.