A $1,000 Par Value Bond with a Fixed 10% Rate

question 12

Multiple Choice

A $1,000 par value bond with a fixed 10% rate of interest pays coupons semiannually.What amount will the bondholder receive on the bond's maturity date?

• A) $50
• B) $100
• C) $500
• D) $1,000
• E) $1,050

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Definitions:

Associate Entity

An entity over which an investor has significant influence, typically through ownership of between 20% and 50% of voting stock.

Equity Recognition

The process in accounting of recognizing increases in ownership interests.

Share Capital

The funds raised by a company through the issuance of shares, representing the ownership interest invested by shareholders.

Acquisition

The process by which a company purchases most or all of another firm's shares or assets to gain control or ownership of that company.