With Most Bond Issues,a Corporation Retains the Right to Pay

question 42

Multiple Choice

With most bond issues,a corporation retains the right to pay off the bonds before maturity.Such bonds are called ________.

• A) secured bonds
• B) fixed bonds
• C) debentures
• D) callable bonds
• E) convertible bonds

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Definitions:

Owner's Equity

Represents an owner's total investment in a company after subtracting liabilities from assets; it signifies the net value an owner has in the business.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back in the future.

Assets

Resources owned or controlled by a business or individual, expected to produce positive economic value or benefits in the future.

Balance Sheet

A financial document that provides a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time.