Some Bonds Allow the Borrower to Repay the Bond by Issuing

question 46

Multiple Choice

Some bonds allow the borrower to repay the bond by issuing stock. These bonds are known as:

• A) convertible bonds.
• B) bonds with a loan covenant.
• C) callable bonds.
• D) senior bonds.

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Definitions:

Specific Performance

A legal remedy requiring a party to fulfill their obligations under a contract, rather than simply paying damages for failing to do so.

Hadley v. Baxendale

A landmark English court decision from 1854 that established the principle for determining damages in breach-of-contract cases, emphasizing foreseeability of damages.

Restitution

A legal principle requiring a party who has unlawfully benefited at the expense of another to compensate the aggrieved party.

Lost Profits

Represent potential earnings that were not realized due to a breach of contract or other wrongful act.