Treasury Stock Should Most Often Be Recorded

question 54

Multiple Choice

Treasury stock should most often be recorded:

• A)At cost.
• B)Par value.
• C)Fair market value at year end.
• D)Face value.

Understand the valuation techniques applicable to companies with negative cash flows but potential for significant earnings.

Analyze the factors and characteristics that lead to successful venture capital deals.

Understand different financing strategies for companies including last resort options.

Comprehend the critical elements of valuation in private company fundraising.

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Definitions:

Coupon Rate

The interest rate per year on a bond, expressed as a fraction of its face value.

Par-Value

The face value of a bond or stock, representing the amount that the issuer agrees to repay at maturity or the nominal value of a share, respectively.

Duration

A measure of the sensitivity of a bond's price to changes in interest rates, essentially a weighted average of the time until cash flows are received.

Coupon Bond

A type of bond that pays the holder a fixed interest payment (coupon) at regular intervals until the maturity date, when the principal amount is repaid.