Which of the Following Accurately Describes a Debenture

question 57

Multiple Choice

Which of the following accurately describes a debenture?

• A) A type of bond that can be exchanged for a fixed number of shares of the issuing corporation's common stock.
• B) A bond with specific assets pledged as collateral.
• C) A type of bond which is not collateralized but backed only by the issuer's general credit standing.
• D) A type of bond issued in the names and addresses of the bondholders.
• E) A type of bond which requires the bond issuer to create a sinking fund of assets set aside at specified amounts and dates to repay the bonds.

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Definitions:

Unit Sales

The number of individual units of a product sold in a specific time period.

Contribution Margin Ratio

The ratio of Contribution Margin (sales minus variable costs) to sales revenue.

Target Profit

The specific amount of net income that a company aims to achieve within a certain time frame.

Monthly

Pertaining to or occurring every month, often used in the context of reporting, billing, or accounting periods.