Smithfield Enterprises Issues Debt with a Maturity of 7 Years

question 20

Multiple Choice

Smithfield Enterprises issues debt with a maturity of 7 years. In the case of bankruptcy, holders of this debt may only claim those assets of the firm that are not already pledged as collateral on other debt. Which of the following best describes this type of corporate debt?

• A) an asset-backed bond
• B) unsecured debt
• C) a mortgage bond
• D) a note

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