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Author Question: Which of the following explains why mortgage bonds have lower required interest rates than debentures? (Read 55 times)

Gabby

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on: Aug 7, 2023
Which of the following explains why mortgage bonds have lower required interest rates than debentures?

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Debentures pay higher coupon payments given their relative higher risk profile since they are debts for which a corporation pledges a particular asset that may be claimed by the secured debtholder in the event of default.


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Mortgage bonds are secured by property, but debentures are unsecured bonds.


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Mortgage bonds have greater potential of loss due to a lack of collateral and thus offer lower coupon payments.


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Debentures pay higher coupon payments given their relative higher risk profile since they provide a lien against specific property as security for the obligation.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by Gabby on Aug 7, 2023

JulianneMu

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Gabby

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Reply 2 on: Aug 7, 2023
Gracias!

xiazhe

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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