A Corporation Made Up of an Automobile Manufacturer, a Plastics

question 22

Multiple Choice

A corporation made up of an automobile manufacturer, a plastics maker, a spark plug manufacturer, a steel mill, and a battery maker is an example of a​

• A)​horizontally-integrated company.
• B)​vertically-integrated company.
• C)​diversified company.
• D)​conglomerate.

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Definitions:

Bond Issuance

The process by which a borrower issues bonds to lenders or investors in order to raise capital, involving agreements to repay the borrowed amount plus interest.

Discount

A reduction from the usual cost of something, typically provided to incentivize purchase or reward customers.

Effective Interest Method

A method of calculating the amortized cost of a bond and of allocating interest expense over the bond's life, based on the bond's yield at issuance.

Premium on Bonds Payable

The amount by which a bond's selling price exceeds its face value, reflecting higher-than-market interest rates.