Chapter 10 Terms

Question 1

Bond

Answer 1

Issuer’s written promise to pay the par value of the bond with interest

Question 2

Par Value

Answer 2

Face value of bond

Question 3

Bond Indenture

Answer 3

Legal contract between the issuer and bondholders

Question 4

Installment Notes

Answer 4

Liability requiring a series of payments

Question 5

Secured Bonds

Answer 5

Takes asset as collateral

Question 6

Unsecured Bonds

Answer 6

Backed by issuer’s general credit standing

Question 7

Term Bonds

Answer 7

Matures on one specific date

Question 8

Serial Bonds

Answer 8

Matures on more than one date

Question 9

Register Bonds

Answer 9

Issued in the names and addresses of the holders

Question 10

Bearer (unregistered) Bonds

Answer 10

Holder of bond is presumed to be the rightful owner

Question 11

Convertible Bonds

Answer 11

Can be exchanged for a fixed number of shares issuing corporation’s stock

Question 12

Callable Bonds

Answer 12

Gives issuer the option to retire bond at a stated dollar amount before maturity

Question 13

Debt-to-Equity Ratio

Answer 13

Total Liabilities / Total Equity