Which One of the Following Is Designed to Benefit the Corporation

question 137

Multiple Choice

Which one of the following is designed to benefit the corporation rather than the bondholder?

• A) Positive covenant.
• B) Sinking fund.
• C) Call provision.
• D) Negative covenant.
• E) Call premium.

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Definitions:

Opportunity Cost

Passing up on potential profits from a range of choices when one selection is made.

Decision-making Process

A series of steps taken by an individual or organization to determine the best action to achieve a particular goal.

Efficient Markets

Financial markets where prices fully reflect all available information.

Marginalism

The process of analyzing the additional or incremental costs or benefits arising from a choice or decision.