A. Will decrease the interest expense of the company
2. The rate of interest that is printed on the bond is called the ________ rate of interest
A. Stated
3. A convertible Bond:
A. Allows the holder to trade the bond for a set number of common shares
4. The Debt ratio:
C. Is calculated by dividing long term debt by total equity
The debt ratio is calculated by dividing:
C) Total liabilities by total assets
A. Will decrease the interest expense of the company
B. Means the bond sold at a gain
C. Are more attractive to investors than a bond sold at face value
D. Will be redeemed before the maturity date
2. The rate of interest that is printed on the bond is called the ________ rate of interest
A. Stated
B. Market
C. Variable
D. Maturity
3. A convertible Bond:
A. Allows the holder to trade the bond for a set number of common shares
B. Converts to a premium or discount at the date of sale.
C. Converts the stated or coupon rate to the market rate interest
D. Automatically becomes common stock at the maturity date
4. The Debt ratio:
A. Show what portion of the assets of a company are financed by owners
B. Indicates the company’s ability to take on more debt.
C. Is calculated by dividing long term debt by total equity
D. Shows the return on all long term liabilities
