Statements about debt and equity is correct

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Reference no: EM131889387

1. Which one of the following statements is correct?

A. A secured debt will have higher coupon than a debenture, all else equal.

B. A bond with a sinking fund will have higher coupon than one without, all else equal.

C. A collable bond will have higher coupon than a non-collable bond, all else equal.

D. A senior debt will have higher coupon than a subordinated debenture, all else equal.

2. Which one of the following statements about debt and equity is correct?

A. Debt shares represnt ownership interest

B. Dividends are liability of the firm and stockholders have legal recourse if dividends are not paid

C. Interest is considered a cost of doing business and is tax deducting

D. Creditors can Vote for the board of directors and other issue

Reference no: EM131889387

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