Final answer:
The actual issue price of a bond represents the present value of all future cash flows related to the bond. The market rate of interest does impact the selling price of bonds. Bonds can be issued at a premium or discount based on the market interest rates.
Step-by-step explanation:
The correct statement among the given options is b. The actual issue price of a bond represents the present value of all future cash flows related to the bond.
When a company issues a bond, the actual issue price of the bond is determined by considering the present value of all future cash flows associated with the bond, including the face value of the bond and the periodic interest payments. The present value calculation takes into account the market interest rates and the time value of money to determine the fair value of the bond.
The market rate of interest does have an impact on the selling price of bonds. If the market rate of interest is lower than the stated rate of interest on the bond, the bond will sell at a premium above its face value. Conversely, if the market rate of interest is higher than the stated rate of interest on the bond, the bond will sell at a discount below its face value.