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bond valuation

Maneesh 02 May 2020 at 13:17 PM

Which one of the following characteristics distinguishes income bonds from other bonds?
A) The bondholder is guaranteed an income over the life of the security.
B) Income bonds pay interest only if the issuing company has earned a sufficient level of income.
C)  By promising a return to the bondholder, an income bond is junior to preferred and common stock.
D) Income bonds are junior to subordinated debt but senior to preferred and common stock.

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Arun Nextwebi 06 May 2020 at 02:23 PM

A) The bondholder is guaranteed an income over the life of the security.

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FACULTY 21 May 2020 at 02:51 PM

Income bonds pay interest only if the issuing company has earned a sufficient level of income.(option B is the answer)

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