Which of the Following Types of Debt Protect a Bondholder

question 58

Multiple Choice

Which of the following types of debt protect a bondholder against an increase in interest rates?

• A) Floating rate debt.
• B) Bonds that are redeemable ("putable")at par at the bondholders' option.
• C) Bonds with call provisions.
• D) All of the above.
• E) Only answers a and b above.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock where dividends accrue and must be paid out before dividends can be distributed to common stockholders.

Par Common Stock

The nominal or face value assigned to a share of common stock, which has relevance in corporate accounting.

Par Value

A nominal value assigned to a stock or bond, representing its face value rather than its market value.

Stock Split

This action increases the number of shares of a corporation by issuing more shares to current shareholders, which typically results in a decrease in the per-share price, making the stock more accessible to a wider range of investors.