AC202 Week 1 Discussion

AC202 Week 1 Discussion - corporation or be subject to...

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Week 1 Discussion Chapter 13, #8 8. What is the difference between market value per share and the par value per share? Market value per share is the price at which stock is bought or sold. Numerous factors affect this value of stocks. Items such as dividends, growth, expected future earnings, and other company and economic factors all play a part in the market value per share of stocks. Par value per share, or par value stock is stock that is assigned a par value which is the amount assigned per share by the corporation in its chapter. This value that has been assigned to the shares helps to establish the minimum legal capital that the buyers of stock must contribute to the
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Unformatted text preview: corporation or be subject to paying at a later date. Fundamental Accounting Principles -- Pg 509 Chapter 14, #6 6. What are the contract rate and the market rate for bonds? The contract rate for bonds is the interest rate specified in a bond indenture (or note); multiplied by the par value to determine the interest paid each period; also called coupon rate, stated rate, or nominal rate. Market rate for bonds is the interest that borrowers are willing to pay and lenders are willing to accept for a specific lending agreement given the borrower's risk level. Fundamental Accounting Principles -- Pg 553...
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