Asked by Victoria Hines on May 01, 2024
Verified
Which of the following might be senior debt?
A) Debentures
B) Callable unsecured bonds
C) Subordinated debentures
D) Both a and b
E) All of the above
Senior Debt
Debt that has priority over other unsecured or otherwise more junior debt owed by the issuer in the case of bankruptcy.
Debentures
A type of long-term debt instrument that is not secured by physical assets or collateral.
Callable Unsecured Bonds
Bonds that can be redeemed by the issuer before their maturity date at a specified call price and are not secured by collateral.
- Comprehend the various categories of bonds, along with their associated risks and interest rate magnitudes.
Verified Answer
NF
Nicole FranciniMay 05, 2024
Final Answer :
D
Explanation :
Senior debt refers to the first level of debts that must be paid upon liquidation, which typically includes debentures and callable unsecured bonds. Subordinated debentures are considered junior debt, not senior.
Learning Objectives
- Comprehend the various categories of bonds, along with their associated risks and interest rate magnitudes.