S08_136B_MT2 - Anderson ECON 136B MT 2 v 1 Name Complete...

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May 14, 2008 Anderson ECON 136B MT 2 v. 1 Name _________________________ Complete questions 1-28 (multiple choice) on green scantron and the remaining problems in your blue-books. WRITE YOUR EXAM VERSION NUMBER ON YOUR SCANTRON. 1. Costs of issuing new stock is treated by the company as: a. An expense when incurred. b. An asset. c. A reduction to equity. d. An asset which is amortized over the life of the company. 2. If a company were to liquidate, who would be the last in line to receive cash from the liquidation? 3. A bond with an 8% stated rate which sold in a 6% market would have what characteristic at the end of its term: 4. Which of the following is not a form of "contributed capital"? 5. Which of the following entitles the owner to unlimited upside if a company does well: a. debt. b. common stock. c. preferred stock. d. All forms of equity ownership. 6. Stock subscriptions receivable are reported as:
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MT 2 v. 1--Page 2 7. Stockholders interest is a "residual interest" representing the assets remaining after all debts have been extinguished. 8. The interest rate written in the terms of the bond indenture is known as the 9. A bond with an 8% stated rate which sold in a 6% market would have what characteristic in the middle of its term: a. A fully amortized discount. b. A discount which has not yet been fully amortized. c. A fully amortized premium. d. A premium which has not yet been fully amortized. 10. A company pays for goods by issuing a 5 year note payable in the amount of $100,000 and bearing interest at 1%. A bank would lend them the money under the circumstances at a rate of 8%. Which of the following statements is most accurate?
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