Which of the Following Statements Is True

question 91

Multiple Choice

Which of the following statements is true?

• A)When investors' required rate of return equals the bond's coupon rate,then the market value of the bond may be selling at face value.
• B)When investors' required rate of return exceeds the bond's coupon rate,then the market value of the bond will be greater than face value.
• C)When investors' required rate of return is less than the bond's coupon rate,then market value of the bond will be greater than face value.
• D)When investors' required rate of return is less than the bond's coupon rate,then the market value of the bond will be less than face value.

---

Definitions:

Margin of Safety Percentage

The difference between actual sales and break-even sales, expressed as a percentage of actual sales.

Contribution Format

An income statement format that distinguishes between fixed and variable costs, highlighting the contribution margin.

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Target Profit

The intended financial goal a company plans to achieve in a specific period through its operational activities.