Which of the Following Is True

question 47

Multiple Choice

Which of the following is true?

• A) It is common for companies to both retire debt and issue new bonds in the same year as a way to replace higher interest rate debt with lower rate issuances.
• B) The corporation will have to pay cash to bond investors when those investors demand to call the bonds.
• C) Payment of interest is an investing activity since we would not have interest unless we borrowed money or sold bonds to the public.
• D) Retractable bonds require cash outflow connected to investing when the issuing corporation redeems the bonds.

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Definitions:

Instrumentality

The perceived likelihood that a certain level of performance will lead to achieving a desired outcome or reward.

Valence

the intrinsic attractiveness or aversiveness of an event, object, or situation, often influencing individuals' motivation.

Equity Theory

A theory of motivation that suggests individuals assess their own input-to-outcome ratios in comparison to others as a measure of fairness in relationships or work situations.

Content Theory

A theory that focuses on identifying and understanding the specific needs that motivate individuals to act in various ways.