Under Normal Conditions, Which of the Following Would Be Most

question 95

Multiple Choice

Under normal conditions, which of the following would be most likely to increase the coupon rate required to enable a bond to be issued at par?

• A) Adding additional restrictive covenants that limit management's actions.
• B) Adding a call provision.
• C) The rating agencies change the bond's rating from Baa to Aaa.
• D) Making the bond a first mortgage bond rather than a debenture.
• E) Adding a sinking fund.

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Definitions:

Decreased Attractiveness

A decline in the appeal or desirability of a product, service, or market opportunity, resulting in reduced interest or demand.

Labor Costs

The total expenses associated with employing staff, including wages, benefits, and taxes.

Transportation Costs

Expenses associated with moving goods from one location to another within the supply chain.

Chinese Yuan

The official currency of the People’s Republic of China, which is issued by the People's Bank of China.