If a Corporate Bond with Face Value of $1,000 Has

question 238

Multiple Choice

If a corporate bond with face value of $1,000 has an interest rate of eight percent paid once a year for a term of 30 years,what is the size of the coupon payment?

• A)$1,000
• B)$300
• C)$80
• D)$8

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Definitions:

Accounting Principle

Fundamental guidelines or rules that govern how financial statements are prepared and presented.

Fasb

The Financial Accounting Standards Board, an organization that establishes accounting and financial reporting standards for companies and nonprofits in the United States.

Standards-Setting Body

An organization or group responsible for developing and issuing standards, such as accounting or auditing standards.

Diluted Earnings Per Share

A metric that shows the quality of a company's earnings per share if all convertible securities were converted into new shares.