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If a Corporation's Earnings Rise,then the Default Risk on Its

question 20

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If a corporation's earnings rise,then the default risk on its bonds will ________ and the equilibrium interest rate on these bonds will ________.


Definitions:

Net Income

Company's overall earnings post the subtraction of taxes and operational costs from its total revenue.

Trend Income Statement

An income statement that shows several years of financial data in a horizontal format, making it easier to identify trends and patterns.

Sales

The total amount of goods or services sold by a company during a specific period.

Trend Balance Sheet

A financial statement that shows how the assets, liabilities, and equities of a company have changed over a period of time.

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