If the Required Return Is Greater Than the Coupon Rate

question 175

Multiple Choice

If the required return is greater than the coupon rate, a bond will sell at ________.

• A) par
• B) a discount
• C) a premium
• D) book value

---

Definitions:

Operating Cycle

The Operating Cycle refers to the period of time it takes for a company to purchase inventory, sell the products, and turn the sales into cash.

Classified Balance Sheets

Balance sheets that organize assets and liabilities into subcategories, such as current and non-current, to provide a clearer financial picture.

Long-Term Investments

Assets that a company intends to hold for more than one fiscal year, such as stocks, bonds, or real estate.

Intangible Assets

Non-physical assets with value to a business, such as trademarks, patents, goodwill, and copyrights.