With Respect to Bond Refunding,which of the Following Is False

question 76

Multiple Choice

With respect to bond refunding,which of the following is false?

• A) Advanced refunding exists when the proceeds of a bond issue are placed in an escrow account pending the maturity date of the existing debt.
• B) Advanced refunding will result in both the original and new debt to be reported in the fund statements.
• C) Current refunding exists when new debt is issued to call the existing debt.
• D) Bond refunding is often done to obtain better interest rates.

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Definitions:

Minimum Return

The least amount of profit or yield expected from an investment, project, or venture to consider it desirable or viable.

Invested Assets

Resources that are obtained with the goal of producing income or profit.

Operating Income

Income generated from the normal business operations of a company, excluding expenses such as interest and taxes.

DuPont Formula

A formula that breaks down Return on Equity (ROE) into three components: profit margin, asset turnover, and financial leverage, to analyze a company's financial performance.