Statement 1: Bond issuers can take additional loans against the properties that were considered as collaterals for the bonds. Statement 2: Bond issuers can impose the taxes paid for registering the bonds against on the interest and principal claims of the bondholders. Statement 3: Bond issuers can prioritize other claims of other creditors over the bondholders in cases of bankruptcy. Statement 4: Bond issuers can pay dividends of shareholders even though the bondholders were not yet paid so long as the board of directors have decided on it. Statement 5: Bond issuers can take additional loans that would potentially compromise the ability of the issuer to keep its promise so long as other creditors permit it. a.All statements are true b.Statements 1, 2 and 4 are true c.Statements 2, 3 and 5 are true d.Statements 2, 4 and 5 are true e.Statements 3, 4 and 5 are true f. All statements are false

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Problem 1Q
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Statement 1: Bond issuers can take additional loans against the properties that were considered as collaterals for the bonds.

Statement 2: Bond issuers can impose the taxes paid for registering the bonds against on the interest and principal claims of the bondholders.

Statement 3: Bond issuers can prioritize other claims of other creditors over the bondholders in cases of bankruptcy.

Statement 4: Bond issuers can pay dividends of shareholders even though the bondholders were not yet paid so long as the board of directors have decided on it.

Statement 5: Bond issuers can take additional loans that would potentially compromise the ability of the issuer to keep its promise so long as other creditors permit it.

a.All statements are true

b.Statements 1, 2 and 4 are true

c.Statements 2, 3 and 5 are true
d.Statements 2, 4 and 5 are true

e.Statements 3, 4 and 5 are true

f. All statements are false

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