Which of the following statements is CORRECT?
A. Subordinated debt has less default risk than senior debt.
B. Convertible bonds have lower coupon rates than non-convertible bonds of similar default risk because they offer the possibility of capital gains.
C. Junk bonds typically provide a lower yield to maturity than investment-grade bonds.
D. A debenture is a secured bond that is backed by some or all of the firm's fixed assets.
E. Junior debt is debt that has been more recently issued, and in bankruptcy it is paid off after senior debt because the senior debt was issued first.
Answer: B
You might also like to view...
Both U.S. GAAP and IFRS require the presentation of an income statement and the presentation of the items of Other Comprehensive Income. U.S. GAAP permits the following reporting format(s) except for:
a. a single statement of comprehensive income that shows all the changes in net assets except from transactions with owners. b. a two-statement presentation that includes an income statement and a separate statement of comprehensive income. c. a separate display of the items comprising Other Comprehensive Income within a statement of changes in shareholders' equity. d. a separate display of the items comprising Other Comprehensive Income within a statement of retained earnings. e. All of the above are acceptable reporting formats.
In order to simplify the record-keeping chores of budgeting, you should use cash to pay bills whenever you can
Indicate whether the statement is true or false.
The only requirement for a valid contract is that the parties voluntarily entered into it
a. True b. False Indicate whether the statement is true or false
________ is a way to reduce head count and lower labor costs.
A. Offering an early retirement plan B. Job hopping C. Encouraging flextime D. Compressing the workweek