The Managers at the Lottadoe Corporation Need to Issue Some

question 163

True/False

The managers at the Lottadoe Corporation need to issue some bonds to raise funds for a major expansion. However, interest rates are currently high by historical standards, and some of the managers at Lottadoe predict that in a few years from now, interest rates will be several percentage points below their current levels. Under these circumstances, the managers might decide to utilize their right to residual claim on assets.