Why does the market price of a bond vary over time

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Reference no: EM13914125

1. Business application- If a company with a high debt to equity ratio wants to increase its debt when the economy is weak, what kind of bond might it issue?

2. What determines whether bonds are issued at a discount, premium, or face value?

3. Why does the market price of a bond vary over time?

4. When is it acceptable to use the straight-line method to amortize a bond discount or premium?

5. Why are callable and convertible bonds considered to add to management's future flexibility in financing a business?

6. Concept- Why must the accrual of bond interest be recorded at the end of an accounting period?

7. Business application- How does a lender assess the risk that a borrower may default-that is, not pay interest and principal when due?

8. Business application- Why might a company lease a long-term asset rather than buy it and issue long-term bonds?

Reference no: EM13914125

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