Business, 09.04.2020 16:24 macp98463oz47dl

A company issues bonds saying that it will use the proceeds for a safe investment. Instead, it uses the proceeds for a risky investment. Which of the following statements is true about this situation.

a. This will result in a decrease in the value of the debt because the company is riskier.

b. This will result in a decrease in the value of the equity because the company is riskier.

c. This will result in a lawsuit from the stockholders because it is bait and switch.

d. This will cause bondholders to convert their bonds to stock.

e. Dividends will go up to compensate shareholders for their increased risk.

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 21:50

The next dividend payment by savitz, inc., will be $2.08 per share. the dividends are anticipated to maintain a growth rate of 6 percent forever. if the stock currently sells for $42 per share, what is the required return?

Answers: 2

Answer

Business, 22.06.2019 00:30

You wants to open a saving account.which account will grow his money the most

Answers: 1

Answer

Business, 22.06.2019 12:50

Kyle and alyssa paid $1,000 and $4,000 in qualifying expenses for their two daughters jane and jill, respectively, to attend the university of california. jane is a sophomore and jill is a freshman. kyle and alyssa's agi is $135,000 and they file a joint return. what is their allowable american opportunity tax credit after the credit phase-out based on agi is taken into account?

Answers: 1

Answer

Business, 22.06.2019 16:00

Winners of the georgia lotto drawing are given the choice of receiving the winning amount divided equally over 2121 years or as a lump-sum cash option amount. the cash option amount is determined by discounting the annual winning payment at 88% over 2121 years. this week the lottery is worth $1616 million to a single winner. what would the cash option payout be?

Answers: 3

Answer

You know the right answer?

A company issues bonds saying that it will use the proceeds for a safe investment. Instead, it uses...

Questions