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Homework answers / question archive / The interest rate on which cash payments to bondholders are based is the market rate

The interest rate on which cash payments to bondholders are based is the market rate

Accounting

The interest rate on which cash payments to bondholders are based is the

    1. market rate.
    2. discount rate.
    3. stated rate.
    4. amortization rate.

 

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Answer:

c .

Step-by-Step explanation

Option C is the correct answer.

The interest rate on which the cash payments to bondholders are based on is the stated interest rate .

The stated interest rate can be less than , equal to or greater than the market interest rate .

On the basis of stated interest rate the cash payments to bondholders are made on the date of maturity.

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