Which of These Statements About Corporate Bonds Is Correct

question 246

Multiple Choice

Which of these statements about corporate bonds is correct?

• A) Bonds provide equity financing.
• B) Issuing new bonds dilutes the existing ownership in the firm.
• C) Interest paid to bondholders represents a tax-deductible business expense.
• D) Debenture bonds require assets pledged as collateral.

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Definitions:

Discrete Random Variable

A type of random variable that assumes a countable number of distinct values, often representing outcomes of a random process.

Poisson Random Variable

A statistical measure that represents the number of events occurring in a fixed interval of time or space which are independent of each other.

Poisson Process

A stochastic process that models the occurrence of events in fixed intervals of time or space where events occur with a constant mean rate and independently of the time since the last event.

Random Pattern

An arrangement or distribution showing no regularity or discernible order, often analyzed to understand the randomness in spatial or sequence data.