Which One of the Following Accurately Describes Bond Refunding

question 70

Multiple Choice

Which one of the following accurately describes bond refunding?

• A)replacing maturing bonds with a new bond issue
• B)calling existing bonds and refinancing those bonds with new debt
• C)paying off bonds early with excess cash generated by the firm
• D)replacing maturing bonds with an equity issue
• E)paying bonds off early to satisfy disgruntled bondholders

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Definitions:

Line-by-Line Method

A method of accounting where the revenues and expenses of subsidiaries are added line-by-line to those of the parent company for consolidated financial reporting.

Jointly Controlled Operations

Business activities that are controlled and managed by two or more parties under a joint agreement, sharing both the benefits and obligations.

Jointly Controlled Assets

Assets that are controlled and managed under a contractual arrangement by two or more parties, each having shared control over the economic benefits.

Contractual Agreement

An official document that outlines the terms and conditions agreed upon between two or more parties.