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eimsori [14]
3 years ago
15

Bond prices depend on the market rate of interest, stated rate of interest, and time. Determine whether the following bonds paya

ble will be issued at face value, at a premium, or at a discount:a. The market interest rate is 4%. Denton issues bonds payable with a stated rate of 4%.b. Starkville issued 8% bonds payable when the market interest rate was 8.25%.
Business
1 answer:
castortr0y [4]3 years ago
4 0

Answer:

a. Par value

b. Discount

Explanation:

a. As the market interest rate is 4% and the stated rate is also 4% so that means the bond would be issued at face value because both the rates are same

b. The bond rate is 8% and the market interest rate is 8.25%

so the stated interest rate is lower than the market interest rate, that means the bond would be issued at discount

hence, the same would be considered

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