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    Orpha's actual discounted cash amount; bonds at premium;

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    1 - Orpah, Inc. borrowed $12,000 for 4 months on a discount basis. The lender used an interest rate of 8% to calculate the discount. The amount of cash Orpah, Inc. actually had available to use from this loan was:
    $12,320
    $11,680
    $12,000
    $11,040

    2 - When a company issues a bond at a premium:
    the company is more profitable than most companies in its industry.
    the investors' interest income will be more than the interest received each year.
    investors perceive the bond to be a very safe investment.
    the investors' interest income will be less than the interest received each year.

    3 - The principal reason for a company having a common stock split is to:
    a. increase the total cash dividends paid to stockholders.
    b. decrease the market value per share of common stock.
    c. capitalize retained earnings.
    d. decrease total owners' equity.

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    https://brainmass.com/business/accounting/orpha-s-actual-discounted-cash-amount-bonds-at-premium-374586

    Solution Preview

    1 - Interest rate for 4 months is 8%*4/12 = 2.667%
    Actual ...

    Solution Summary

    The solution answer questions related to Orpha's actual discounted cash amount; bonds at premium; reason for stock split.

    $2.19

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