The Organization That Purchases the Bonds from an Issuing Corporation

question 191

Multiple Choice

The organization that purchases the bonds from an issuing corporation and resells them to its clients or sells the bonds for a commission is the:

• A) underwriter.
• B) bank.
• C) stockholders.
• D) bondholders.

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Definitions:

Cumulative

Describes something that increases or accumulates over time, often used in the context of investments or financial statements.

Legal Capital

The portion of a company's equity that cannot legally be distributed to shareholders as dividends, often linked to the par value of common and preferred stock.

Par Value

A nominal dollar amount assigned to corporate shares, representing the minimum price per share that shares can be issued at.

Stated Value

A value that has been assigned to a corporation's stock that does not have a par value, often used for accounting purposes.