Bondholders Are Creditors of the Issuing Corporation

question 82

True/False

Bondholders are creditors of the issuing corporation.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily reflect market value.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of ownership remains the same.

Liquidating Dividend

A return of capital to shareholders, usually during the dissolution of a company, exceeding the original investment amount.

Retained Earnings

Cumulative net income minus dividends paid to shareholders, representing the portion of profit reinvested in the business.