Accounting 2 Chapter 15 - Chapter 16
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| What are three advantages of common stock? | (1)Stockholder control is not affected(2)Tax savings result(3)Earnings per share may be higher
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| What is a major disadvantage of the use of bonds? | Interest must be paid and principle repaid.
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| What are some types of bonds? | (a)Secured and Unsecured(debenture) bonds(b)Term and serial bonds(c)Registered and bearer(or coupon) bonds(d)Convertible and callable bonds
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| What is the rate of interest investors demand for loaning funds to a corporation? | Market interest rate
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| What is the discount on bonds payable? | A contra account
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