Question

Match the items below by entering the appropriate code letter in the space provided.

1.     Bond certificate                                      F.    Payout ratio
2.     Market interest rate                                G.    Declaration date
3.     Discount on bonds payable                   H.    Legal capital
4.     Face value                                             I.      Treasury stock
5.     Maturity date                                         J.     Cumulative dividend

_------_ 1. Occurs when the contractual rate of interest is less than the market rate of interest.

-------     2. A legal document that indicates the face value of the bonds and other data.

------      3. The rate investors demand for loaning funds to a corporation.

____    4. Amount of principal due at the maturity date of the bond.

--------- 5. The time that the final payment on a bond is due from the bond issuer.

____     6. The date the board of directors formally declares a dividend.

-------     7. The amount that must be retained in the business for the protection of creditors.

____     8. Preferred stockholders have a right to receive current and unpaid prior-year dividends before common stockholders receive any dividends.

____     9. Measures the percentage of earnings distributed in the form of dividends to common stockholders.

____ 10.    Corporation’s own stock that has been reacquired by the corporation but not retired.

Answer 1

C. Discount on bonds payable	1. Occurs when the contractual rate of interest is less than the market rate of interest.
A. Bond certificate	2. A legal document that indicates the face value of the bonds and other data.
B. Market interest rate	3. The rate investors demand for loaning funds to a corporation.
D. Face value	4. Amount of principal due at the maturity date of the bond.
E. Maturity date	5. The time that the final payment on a bond is due from the bond issuer.
G. Declaration date	6. The date the board of directors formally declares a dividend.
H. Legal capital	7. The amount that must be retained in the business for the protection of creditors.
J. Cumulative dividend	8. Preferred stockholders have a right to receive current and unpaid prior-year dividends before common stockholders receive any dividends.
F. Payout ratio	9. Measures the percentage of earnings distributed in the form of dividends to common stockholders.
I. Treasury stock	10.    Corporation’s own stock that has been reacquired by the corporation but not retired.