Multiple Choice
Imagination Industries plans to issue 8-year, 8%, $400,000 bonds paying interest on an annual basis, at a $5,760 premium. Which one of the following statements is true?
A) The cash paid to bondholders will be $5,760 each interest period
B) Imagination will receive $394,240 as the issue price
C) Imagination's annual interest expense on the bonds will be greater than the amount of interest payments to bondholders each year
D) Imagination's annual interest expense on the bonds will be less than the amount of interest payments to bondholders each year
Correct Answer:
Verified
Correct Answer:
Verified
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