Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Which one of these statements is correct? Select one: a
Which one of these statements is correct? Select one: a. Bonds often provide tax benefits to Issuers. ob. All bonds are treated equally in a bankruptcy proceeding. O c. A debenture is a senior secured debt. O d. Most long-term bond issues are referred to as unfunded debt. o e. The risk of a company financially falling decreases when the company issues bonds.
Ans is a Bonds often provide tax benefits to Issuers. Are true statements and all other 4 are false.
Explanation: Bonds usually pay interest to the bond holders that is fixed and this interest expense is tax deductible so we can say that often all bonds provide tax benefits.
Other side, Option b says, in bankruptcy all bonds are treated equally but its not true, secured bonds are paid first before unsecured bonds.
Option c says, debentures are senior secured, but its unsecured form of bonds.
Option d says long term bonds are unfunded debt, but as per definition short term bonds are unfunded , and long terms are funded.
Option e says issuing bonds decreases risk of financially failing, but its increases the risk of financially filing.
