5. Which is correct about debt securities?a. Debt securities make the holders owners and give them the right to vote in all matters of the firm.b. Debt securities give the holders the right to receive interest and dividends.c. Debt securities give the holders the right to be elected as board of directors or to vote them.d. Debt securities give the holders the right to convert them into stocks if the indenture states.e. All of the above

a and c are not correct because debt securities holders are NOT the owners. They are lenders to the…

Answered: Which is correct about debt securities?…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 5MC: Which of the following is not one of the five primary responsibilities of the Securities and...

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Similar questions

Which of the following statements is NOT true of PIPE transactions? In a PIPE transaction, investors purchase securities (equity or debt) directly from a publicly traded company in a private placement. PIPE transaction gives issuers faster access to capital. The securities are virtually always sold to the investors at a discount to the price at which they would sell in the public markets. PIPE transactions are registered with the SEC.
Mr. Ahmed would like to buy securities. Which of the following securities should he not to buy to become the owner of a business? i Debentures ii. Equity Shares iii. Public Depositiv Bonds
_____________________________ are issued certificates, where big corporations or governments act as the borrower and general public acts as the lender (i.e. creditor). Select one: A. None of the given options B. Bonds C. Equity D. Preference Shares
Finance A corporation can raise money by selling stocks and/or bonds. From an investor's perspective, what is the difference between a bond and stock? O 1. If an investor owns a corporate bond, the investor owns a part of the company. O 2. A corporation guarantees interest payments to a bond investor but does not guarantee dividend payments to stock investor. O 3. A corporation guarantees dividend payments to a stock investor but does not guarantee interest payments to bond investor. O4. Stocks can appreciate in value, bonds do not change value.
A corporation can raise money by selling stocks and/or bonds. From an investor's perspective, what is the difference between a bond and stock? O 1. If an investor owns a corporate bond, the investor owns a part of the company. O 2. A corporation guarantees interest payments to a bond investor but does not guarantee dividend payments to stock investor. O 3. A corporation guarantees dividend payments to a stock investor but does not guarantee interest payments to bond investor. O4. Stocks can appreciate in value, bonds do not change value.
Which of the following are differences between a bond and a common stock? (Select all that apply.) A. A corporation has to pay all bondholders before paying stockholders. B. A bond is a claim on the earnings and assets of a corporation, whereas a common stock promises to make periodic payments for a specified period of time. C. A corporation has to pay all stockholders before paying bondholders. D. A bond is a debt instrument that entitles the owner to receive periodic amounts of money until its maturity date, whereas a common stock represents a share of ownership of the institution that has issued the stock.
One of the primary reasons for investing in debt securities includes a. Deducting interest payments for tax purposes.b. Receiving dividend payments.c. Earning interest revenue.d. Acquiring ownership control in other companies.
One of the primary reasons for investing in equity securities includes a. Receiving dividend payments. b. Acquiring debt of competing companies. c. Earning interest revenue. d. Deducting dividend payments for tax purposes.
Which is false about long-term sources of a firm’s capital? a. Preferred shares are securities whose intrinsic value is based on prospective earnings b. Some types of bank loans may require collateral from potential debtors c. Retained earnings are internal sources of funding that can be utilized for expansion d. All types of corporations may issue equity securities to the public
Which of the following is not an advantage of going public? a. Access to capital. b. Compliance. c. Use of stock options. d. Liquidity for owners’ investments
In terms of public offerings of bonds, what is an indenture? A) a list of the duties of a trust company representing the bondholders' interests B) a memorandum that must be produced to describe the details of a bond offering C) a formal contract that specifies a firm's obligations to the bondholders D) a schedule of the fees charged by an underwriting company
Which of the following statements is most correct? Group of answer choices Money market transactions include common stock transactions. Preferred stockholders are paid before bondholders but after common stockholders. One of the problems in corporations is that managers often put their own interests ahead of those of the stockholders. U.S. T-bills are considered risky securities. None of the above statements is correct.

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