Bao Capital issues a 4-year semiannual-pay bond with a face value of $10 million and

ce cost” refers to the:

A.total value of benefits already paid to retirees who are still receiving pension payments.

B.present value of the pension benefits due to employees based on their employment up to the date of the statement.

C.present value of the increase in future pension benefits from a change in the terms of the pension plan.

Bao Capital issed a 5-year, $50 million face, 6% semiannual bond when market interest rates were 7%.The market yield of the bonds was 8% at the beginning of the next year.What is the initial balance sheet liability, and what is the interest expense that the company should report for the first half of the second year of the bond’s life (the third semiannual period)”

es is most accurate?

A.Under an operating lease, the lease treats the entire lease payment as a cash outflow from operations.

B.The lessee’s current ratio is the same whether a lease is treated as an operating or finance lease.

C.At the inception of a direct financing lease, the lessor recognizes gross profit.

nds currently available in the market that have similar attributes as the bond being considered.

Matrix pricing is most similar to the :

A. Debt-rating approach only.

B. Yield-to-maturity approach.

C. Yield-to-maturity approach and Debt-rating approach.

lion and total long-term debt of $2,125 million bearing an average interest rate of 10%.

Note 8: Operating leases

After adjustment for the off-balance-sheet financing, the debt-to-total-assets ratio for the company is closest to:

A. 58%.

B. 62%.

C. 72%.

coupon bond or a coupon bond with warrants attached. The proceeds from either issue would be the same. What will be the effect on their interest expense and balance sheet liability if they issue the bonds with warrants as compared to the straight bonds? For the bonds with warrants the:

nce lease,

A. The interest coverage ratio will decrease.

B. The return on assets ratio will decrease.

C. The asset turnover ratio will increase.

0% coupon paid semi-annually and a face value of $10,000, maturing in two years. Using the effective interest method, calculate the amount of interest expense associated with the Class H bonds reported by Bao for the period ending 12/31/x3.

A. $405.

B. $808.

C. $1,000.

e:

A. only the annual lease payment.

B. minimum lease payments for each of the next five years and the sum of lease payments more than five years in the future.

C. minimum lease payments for each of the next ten years and the sum of lease payments more than ten years in the future.

firm does not use the fair value reporting option, how is the change in the market value of the firm’s debt most likely to be reported in the firm’s financial statements?

A. The gain or loss in market value must be calculated and disclosed in the footnotes to the financial statements.

B. Net income and equity are unaffected, but the change is disclosed by the firm’s management.

C. Net income is unaffected, but the change in market value is recorded in other comprehensive income.