Which of the Following Statements Is False

question 70

Multiple Choice

Which of the following statements is false?

• A) The bond's expected return, which is equal to the firm's debt cost of capital, is less than the yield to maturity if there is a risk of default.
• B) The two best-known bond-rating companies are Standard & Poor's and Dow Jones.
• C) Bonds in the bottom five categories are often called speculative bonds, junk bonds, or high-yield bonds.
• D) Bond ratings encourage widespread investor participation and relatively liquid markets.

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Definitions:

Profitable

Generating income that exceeds expenditures, thus providing a financial gain for an entity.

Corporate Citizenship

The extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their stakeholders.