Asked by Abena Opoku on Jun 18, 2024
Verified
A legal document which summarizes the rights and privileges of bondholders as well as the obligations and commitments of the issuing company is called
A) a bond indenture.
B) a bond debenture.
C) trading on the equity.
D) a term bond.
Bond Indenture
The contract between a bond issuer and the bondholders, outlining terms such as interest rates, repayment schedules, and other conditions.
Bondholders
Individuals or entities that hold the debt securities issued by corporations or governments.
Issuing Company
The entity that offers its own securities like stocks or bonds for sale to investors to raise capital.
- Understand the legal and contractual elements of bonds, encompassing the function and contents of a bond indenture.
Verified Answer
SD
Spooky DookieJun 21, 2024
Final Answer :
A
Explanation :
A bond indenture is a legal document that outlines the terms and conditions of a bond issue, including the rights, privileges, obligations, and commitments of both the bondholders and the issuing company. It includes details about the interest rate, maturity date, and redemption provisions, among other things.
Learning Objectives
- Understand the legal and contractual elements of bonds, encompassing the function and contents of a bond indenture.