Nick Bosch has prepared the following list of statements about bonds.
- Bonds are a form of interest-bearing notes payable.
- When seeking long-term financing, an advantage of issuing bonds over issuing common stock is that stockholder control is not affected.
- When seeking long-term financing, an advantage of issuing common stock over issuing bonds is that tax savings result.
- Secured bonds have specific assets of the issuer pledged as collateral for the bonds.
- Secured bonds are also known as debenture bonds.
- Bonds that mature in installments are called term bonds.
- A conversion feature may be added to bonds to make them more attractive to bond buyers.
- The rate used to determine the amount of cash interest the borrower pays is called the stated rate.
- Bond prices are usually quoted as a percentage of the face value of the bond.
- The present value of a bond is the value at which it should sell in the marketplace.
Instructions
Identify each statement as true or false. If false, indicate how to correct the statement.