Question: A company issues 5 - year zero - coupon bond. Which of the following are true at the date of issuance? 1 . The firm

A company issues 5-year zero-coupon bond. Which of the following are true at the date of issuance?
1. The firm will not record any interest expense until the bond matures.
2. The effective interest rate (market rate) is higher than the coupon rate.
3. The discount will cause interest expense to increase over the life of the bonds.
4. The proceeds received will be greater than the final principal payment.
5. None of the above.

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