I would say false. the par value is not necessarily the amount that the investor must pay in order to purchase the preferred stock. the par value is known to be the market price of the stock however, investors may offer the stock above or below the par value depending on the decision of the board
3.20 is the real risk-free rate
<h3>What is
risk-free rate?</h3>
The risk-free rate of return, commonly abbreviated as the risk-free rate, is the rate of return on a hypothetical investment with scheduled payments over a set period of time that is assumed to meet all payment obligations.
Subtract the inflation rate from the yield on the Treasury bond that corresponds to the duration of your investment to calculate the real risk-free rate.
The risk-free rate determines the return an investor can expect from an investment over a specified time period. A risk-free rate is calculated by deducting the current inflation rate from the total yield of the treasury bond that corresponds to the investment duration.
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Answer:
November 17
Trade Receivable-Thomas Company $56,250 (debit)
Revenue $56,250 (credit)
November 26
Cash $55,125 (debit)
Discount Allowed $1,125 (debit)
Trade Receivable-Thomas Company $56,250 (credit)
Explanation:
November 17
Recognize Revenue and Recognize an Asset : Trade Receivable
Trade Receivable-Thomas Company $56,250 (debit)
Revenue $56,250 (credit)
Revenue Calculation = 100 units × $760 × 75% = $56,250
November 26
The payment date is within the cash discount period in terms of credit sale. Hence Thomas Company is granted cash discount of 2% (2/10, n/30).
Cash $55,125 (debit)
Discount Allowed $1,125 (debit)
Trade Receivable-Thomas Company $56,250 (credit)
The 4-year term instrument's nominal rate is higher than the 2-year term instrument's nominal rate.
What is nominal rate?
The increase in payment you make to the lender for using the borrowed funds is known as the nominal interest rate.
The rate of compounding is higher for 2-year investments than for 4-year investments, which are compounded semi-annually.
As a result, option (b) is correct.
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