Which of the Following Statements Is Most Correct

question 20

Multiple Choice

Which of the following statements is most correct?

• A) A firm with a sinking fund payment coming due would generally choose to buy back bonds in the open market, if the price of the bond exceeds the sinking fund call price.
• B) Income bonds pay interest only when the amount of the interest is actually earned by the company. Thus, these securities cannot bankrupt a company and this makes them safer to investors than regular bonds.
• C) One disadvantage of zero coupon bonds is that issuing firms cannot realize the tax savings from issuing debt until the bonds mature.
• D) Other things held constant, callable bonds should have a lower yield to maturity than noncallable bonds.
• E) All of the above statements are false.

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Definitions:

Major Organic Product

Refers to the principal product resulting from an organic chemical reaction, often the desired compound in synthetic chemistry pathways.

Dehydrohalogenation

A chemical reaction that involves the removal of a hydrogen atom and a halogen atom from an organic molecule, typically leading to the formation of an alkene.

Alkyl Halide

Organic compounds containing a halogen atom bonded to an alkyl group, widely used in organic synthesis and industrial applications.

Reaction Mechanism

The detailed process or pathway through which reactants are converted into products in a chemical reaction.