Of the Following Provisions That Might Be Found in a Bond

question 1

Multiple Choice

Of the following provisions that might be found in a bond indenture, which would tend to reduce the coupon interest rate?

• A) A call provision
• B) No restrictive covenants
• C) A sinking fund provision
• D) Change in bond rating from AAA to AA
• E) None of the above (that is, all will increase the coupon rate)

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Definitions:

Coercive Power

The capacity to punish or withhold positive outcomes as a means of influencing other people.

Incentives

Rewards or benefits offered to motivate employees or stimulate greater output or investment.

Servant Leadership

A leadership philosophy that emphasizes the leader's role as serving the needs of others, putting the well-being of their team and organization first.

Empowerment

The process of giving employees power and responsibility to make decisions and contribute to the organization's success, often leading to increased job satisfaction and productivity.