As a General Rule, a Company's Debentures Have Higher Required

question 37

True/False

As a general rule, a company's debentures have higher required interest rates than its mortgage bonds because mortgage bonds are backed by specific assets while debentures are unsecured.

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Definitions:

Adversary System

A legal system in which two opposing parties present their cases to an impartial judge or jury.

Substantive Law

The set of laws that governs how members of a society are to behave, as opposed to procedural law which dictates how the legal system operates.

Correlative

Having a mutual relationship, where one thing corresponds with or is related to another.

Breaches

The failure to perform as stipulated by the terms of a contract, which may result in legal action and damages.