Question

View each of the below-listed provisions that are often contained in bond indentures alone. Which of these provisions would tend to REDUCE the yield to maturity that investors would otherwise require on a newly issued bond?1. Fixed assets are used as security for a bond.2. A given bond is subordinated to other classes of debt.3. The bond can be converted into the firm's common stock.4. The bond has a sinking fund.5. The bond has a call provision.6. The indenture contains covenants that restrict the use of additional debt.A. 1, 3, 4, 6B. 1, 4, 6C. 1, 2, 3, 4, 6D. 1, 3, 4, 5, 6E. 1, 2, 3, 4, 5, 6

Answer 1

The answer would be