3. Which method of amortizing a discount will generate the same interest expense each year over the life of a bond? Group of answer choices Coupon amortization Market amortization Straight-line amortization Effective amortization       4. A bond has a face value of $100,000 and sold for $98,000.  How much of the discount will be amortized in the first year if the company uses straight-line amortization and the bond has a 10 year life? Group of answer choices $200 $2,000 $9,800 $10,000       5. A bond has a face value of $100,000 and sold for $98,000.  The stated interest rate is 5%.  The market interest rate is 6%.  The bond has a ten year life.  How much will interest expense be in the first year of the bond's life? Group of answer choices $6200 $5200 $4800 $5800

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 9P: Bond Valuation and Interest Rate Risk The Garraty Company has two bond issues outstanding. Both...
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3. Which method of amortizing a discount will generate the same interest expense each year over the life of a bond?
Group of answer choices
Coupon amortization
Market amortization
Straight-line amortization
Effective amortization
 
 
 

4. A bond has a face value of $100,000 and sold for $98,000.  How much of the discount will be amortized in the first year if the company uses straight-line amortization and the bond has a 10 year life?
Group of answer choices
$200
$2,000
$9,800
$10,000
 
 
 

5. A bond has a face value of $100,000 and sold for $98,000.  The stated interest rate is 5%.  The market interest rate is 6%.  The bond has a ten year life.  How much will interest expense be in the first year of the bond's life?
Group of answer choices
$6200
$5200
$4800
$5800
 
 
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