Secured Bond - Answers a bond issued with some form of collateral
Mortgage Bond - Answers a bond secured by real estate
Unsecured Bond - Answers A bond with no collateral; also called a debenture bond.
Callable Bond - Answers a bond that the issuer has the right to pay off before its maturity date
Convertible Bond - Answers may be exchanged for common stock of the firm, at the holder's
option
When yield=interest rate - Answers Bond sells at par
When yield>interest rate - Answers Bond sells at discount
When yield<interest rate - Answers Bond sells at premium
Discount - Answers Debit
Premium - Answers Credit
Effective interest rate - Answers Interest rate=yield*book value of bond at start of period
Straight-line method - Answers Equal amounts of premium or discount are amortized to interest
expense each period
Debt to equity - Answers Total liabilities/total equity
Debt to total assets - Answers Total liabilities/total assets
Long-term debt to equity - Answers Long-term debt/total equity
Times interest earned (Accrual Basis) - Answers Operating income/interest expense
Times interest earned (Cash Basis) - Answers (Cash Flow from Operations + Taxes Paid +
Interest Paid)/ Interest Paid
Stockholder's equity - Answers The owners' claim to assets after liabilities have been deducted
Four components of equity - Answers Capital stock
Retained earnings
Accumulated other comprehensive income
Treasury stock
Common stock - Answers Voting rights