Which of the Following Is True of Fixed-Rate Bonds

question 100

Multiple Choice

Which of the following is true of fixed-rate bonds?

• A) Returns from fixed-rate bonds are dependent on the profitability of the issuing company.
• B) Investors get back the face value of the bond at maturity of fixed-rate bonds.
• C) Fixed-rate bonds issue cash payoffs only at maturity of fixed-rate bonds.
• D) Investors get a share of the company's profit when using fixed-rate bonds.

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Definitions:

Par Value

The face value of a bond or the stock value stated in the corporate charter, not necessarily related to its market value.

Fair Value

The estimated price at which an asset or liability could be traded in a fair transaction between willing parties.

Stock Issuance Costs

Expenses incurred by a company to register and issue shares of stock, such as legal, accounting, and printing costs.

Voting Shares

Shares of a corporation's stock that grant the shareholder the right to vote on corporate matters, such as the election of the board of directors.