The Total Direct Costs of a Debt Issue,when Expressed as a Percentage

question 42

Multiple Choice

The total direct costs of a debt issue,when expressed as a percentage of gross proceeds,tends to:

• A)increase as the quality of the debt increases.
• B)decrease as the size of the issue decreases.
• C)decrease as the proceeds of the bond issue increase.
• D)decrease when the bonds are convertible rather than straight.
• E)be relatively the same regardless of the type or quality of the debt issue.

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Definitions:

Revalued Upward

Revalued upward is a term used in accounting to indicate an increase in the book value of an asset to reflect its current market value.

Subsequent Depreciation

The allocation of an asset's cost over its useful life, considering any adjustments made following the asset's initial measurement and recognition.

Revaluation Method

A method used to adjust the carrying value of an asset to its current market value on the balance sheet.

IFRS

The International Financial Reporting Standards (IFRS) provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.