Which of the Following Statements Is CORRECT

question 42

Multiple Choice

Which of the following statements is CORRECT?

• A) other things held constant, a callable bond should have a lower yield to maturity than a noncallable bond.
• B) once a firm declares bankruptcy, it must then be liquidated by the trustee, who uses the proceeds to pay bondholders, unpaid wages, taxes, and lawyer fees.
• C) income bonds must pay interest only if the company earns the interest. thus, these securities cannot bankrupt a company prior to their maturity, and this makes them safer to the issuing corporation than "regular" bonds.
• D) a firm with a sinking fund that gave it the choice of calling the required bonds at par or buying the bonds in the open market would generally choose the open market purchase if the coupon rate exceeded the going interest rate.
• E) one disadvantage of zero coupon bonds is that the issuing firm cannot realize any tax savings from the debt until the bonds mature.

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Definitions:

Customer Expectations

The set of beliefs or standards that consumers hold regarding the anticipated quality and service of a product or service before purchase.

Service Quality Gaps

Discrepancies between customers' expectations of service and their actual experiences, typically indicating areas needing improvement.

Service Gap(s)

Discrepancies between customer expectations for service performance and the actual service provided, resulting in customer satisfaction issues.

Low Tech

Technologies or products that are characterized by simplicity and lack of advanced features, often appealing due to their ease of use and reliability.