What bonds will sell at a price that is

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Reference no: EM132984775

Fortuna Company's 2020 financial statements contain the following selected data:

Income Taxes $50,000

Interest Expense 25,000

Net Income 150,000

Problem 1: Fortuna Company's times interest earned for 2020 is:

A) 8.0 times

B) 9.0 times.

C) 6.0 times.

D) None of the above.

Problem 2: A bond is issued with a face amount of $700,000 and a stated interest rate of 11%. The current market rate of interest is 10%. These bonds will sell at a price that is:

A) Equal to $700,000.

B) Higher than $700,000.

C) Lower than $700,000.

D) None of the above

Reference no: EM132984775

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