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3 years ago

Which of the following actions would be most likely to reduce potential conflicts between stockholders and bondholders?

Business

1 answer:

bagirrra123 [75]3 years ago

5 0

Answer:

C. Including restrictive covenants in the company's bond indenture (which is the contract between the company and its bondholders).

Explanation:

One of the major actions that would most likely reduce potential conflicts between stockholders and bondholder is the Inclusion of restrictive covenants in the company's bond indenture (which is the contract between the company and its bondholders).

Restrictive covenants are Bond covenants that are designed to protect the interests of both parties by forbiding the issuer from undertaking certain activities that are detrimental to the holders of the bond.

Restrictive covenants manages the agency problem between stockholders and bondholder.

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Sunland Company issued its 9%, 25-year mortgage bonds in the principal amount of $2,990,000 on January 2, 2006, at a discount of

sveticcg [70]

Answer:

Cash 2,839,000 debit

discount on BP 151,000 debit

Bonds Payabl*e 2,990,000 credit

--to record bonds issuance--

interest expense 275,140 debit

discount on BP 6,040 credit

cash 269,100 credit

--to record interest payment--

Explanation:

We will cacualte the cash outlay per interest paymenr

2,990,000 x 9% = 269,100 cash outlay

Then, we divide the discount over the life of the bond to knwo the depreciation:

amortization 151,000 / 25 = 6040

interest expense: 269,100 + 6040 = 275,140

As both, the amortization and cash putlay are fixed th interest entry repeats it selft each year.

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3 years ago

Why would a company choose to outsource? what are the advantages and disadvantages to outsourcing?

maxonik [38]

A company would likely outsource service or manufacturing to reduce service or production costs; this is why a majority of consumer products are made in east Asian countries, as they have very low manufacturing and labor costs. However, these cheap goods and services tend to have lower quality and/or performance when compared to their domestic, higher-priced counterparts. In short, outsourcing is generally used to cut costs, but the quality of goods or services typically suffers to some degree.

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3 years ago

Read 2 more answers

Could somebody do my quiz for me on e2020?<br> don't fail make good grades

Gre4nikov [31]

By the looks of it you already got it taken care of but thanks for the points ;)

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3 years ago

Stine Corp.'s trial balance reflected the following account balances at December 31, 2014: Accounts receivable (net) $19,000 Tra

tensa zangetsu [6.8K]

Answer:...

Explanation:

Stine Corp.'s trial balance reflected the following account balances at December 31, 2014:

Accounts receivable (net) $19,000

Trading securities 6,000

Accumulated depreciation on equipment and furniture 15,000

Cash 16,000

Inventory 30,000

Equipment 25,000

Patent 4,000

Prepaid expenses 2,000

Land held for future business site 18,000

In Stine's December 31, 2014 balance sheet, the current assets total is [A] (please enter your answer as a whole number without any dollar sign, thousand separator, or decimal points.

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3 years ago

What example best describes the market structure of monopolistic

kenny6666 [7]

Answer:

Explanation:

I think it is D a city government owns and operates all Waste Management Services .

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3 years ago