Under Normal Conditions,which Action Would Be Most Likely to Increase

question 151

Multiple Choice

Under normal conditions,which action would be most likely to increase the coupon rate required to enable a bond to be issued at par?

• A)adding additional restrictive covenants that limit management's actions
• B)adding a call provision
• C)the rating agencies changing the bond's rating from Baa to Aaa
• D)adding a sinking fund

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Definitions:

Year 2

Typically refers to the second year in a given context, such as the second year of a company's operations, a multi-year study, or an investment timeline.

Equity Multiplier

A financial ratio that measures a company's leverage, calculated as total assets divided by total equity.

Year 2

The second year in a given time frame or series, often referring to fiscal or calendar years.

Operating Cycle

The average period of time it takes for a company to purchase inventory, sell products, and collect cash from customers.