Amortization of a Bond Premium Results in

question 167

Multiple Choice

Amortization of a bond premium results in

• A)a decrease of the carrying value of bonds.
• B)no change in stockholders' equity.
• C)an increase in interest expense.
• D)a decrease in the Cash account.

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Definitions:

Defensive Measure

Strategies employed by a target company to prevent or discourage unwanted takeover attempts, including poison pills, shark repellents, and golden parachutes.

Target Company

A company that is the subject of a takeover attempt, whether through a merger or acquisition strategy by another company.

Potential Acquirer

A company or individual who is likely or has shown interest in purchasing another company or asset.

Pro Rata

A method of allocating an amount proportionally based on a share of some total, such as time or quantity.