The following are terms or phrases that were introduced in the chapter.
1. Bond certifi cate.
2. Premium (on a bond).
3. Discount (on a bond).
4. Times interest earned.
5. Present value.
6. date.
7. Callable bonds.
8. Market interest rate.
9. Contingencies.
10. Secured bonds.
11. Contractual (stated) interest rate.
12. Unsecured bonds.
13. Off -balance-sheet financing.
14. Face value.
15. Convertible bonds
Instructions
Match the term or phrase with the appropriate description below.
a.__________The value today of an amount to be received at some date in the future after taking into account current interest rates.
b.__________Bonds that have specifi c assets of the issuer pledged as collateral.
c.__________Events with uncertain outcomes that may represent potential liabilities.
d.__________Bonds that can be converted into at the bondholder’s option.
e.__________A legal document that indicates the name of the issuer, the of the bonds, and other data such as the contractual interest rate and the date of the bonds.
f.__________Bonds that the issuing company can redeem (buy back) at a stated dollar amount prior to maturity.
g.__________The date on which the fi nal payment on a bond is due from the bond issuer to the investor.
h.__________Rate used to determine the amount of interest the issuer pays and the investor receives.
i.__________The difference between the of a bond and its selling price when a bond is sold for less than its face value.
j.__________A measure of a company’s solvency, calculated by dividing the sum of net income, interest expense, and income tax expense by interest expense.
k.__________The rate investors demand for loaning funds to the corporation.
l.__________Amount of principal due at the date of the bond.
m.__________Bonds issued against the general credit of the borrower.
n.__________The intentional effort by a company to structure its financing arrangements so as to avoid showing liabilities on its balance sheet
o.__________The difference between the selling price and the of a bond when a bond is sold for more than its face value.
