Which of the Following Statements About Debentures Is FALSE

question 43

Multiple Choice

Which of the following statements about debentures is FALSE?

• A)The earning ability of the issuing corporation is of great concern to the bondholder.
• B)Debentures are viewed as less risky than secured bonds.
• C)Debentures must provide investors with a higher yield than secured bonds.
• D)Debentures allow the firm to issue debt and still preserve some future borrowing power.