Which of the following would be an indication that corporate debt is disguised equity?

Question

Quizplus · Accepted Answer

If debt is issued to the shareholders in the same proportion as stock, it suggests that the debt is being used to essentially distribute equity to shareholders. This is known as debt disguised as equity or debt/equity hybrid securities. Choices B, C, and D are characteristics of traditional debt instruments and do not necessarily indicate disguised equity.

Which of the Following Would Be an Indication That Corporate