Which of the following statements is (are) correct? (Morethan one statement may be correct.)a. A bond issue is a technique for subdividing a very largeloan into many small, transferable units.b. Bond interest payments are contractual obligations,whereas the board of directors determines whether ornot dividends will be paid.c. As interest rates rise, the market prices of bonds fall; asinterest rates fall, bond prices tend to rise.d. Bond interest payments are deductible in determiningincome subject to income taxes, whereas dividendspaid to stockholders are not deductible.
Which of the following statements is (are) correct? (Morethan one statement may be correct.)a. A bond issue is a technique for subdividing a very largeloan into many small, transferable units.b. Bond interest payments are contractual obligations,whereas the board of directors determines whether ornot dividends will be paid.c. As interest rates rise, the market prices of bonds fall; asinterest rates fall, bond prices tend to rise.d. Bond interest payments are deductible in determiningincome subject to income taxes, whereas dividendspaid to stockholders are not deductible.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Which of the following statements is (are) correct? (More
than one statement may be correct.)
a. A bond issue is a technique for subdividing a very large
loan into many small, transferable units.
b. Bond interest payments are contractual obligations,
whereas the board of directors determines whether or
not dividends will be paid.
c. As interest rates rise, the market
interest rates fall, bond prices tend to rise.
d. Bond interest payments are deductible in determining
income subject to income taxes, whereas dividends
paid to stockholders are not deductible.
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