Which of the Following Statements Is CORRECT

question 90

Multiple Choice

Which of the following statements is CORRECT?

• A) Senior debt is debt that has been more recently issued,and in bankruptcy it is paid off after junior debt because the junior debt was issued first.
• B) A company's subordinated debt has less default risk than its senior debt.
• C) Convertible bonds generally have lower coupon rates than non-convertible bonds of similar default risk because they offer the possibility of capital gains.
• D) Junk bonds typically provide a lower yield to maturity than investment-grade bonds.
• E) A debenture is a secured bond that is backed by some or all of the firm's fixed assets.