Companies with good credit ratings use ___________________ bonds extensively.

Question

Quizplus · Accepted Answer

Companies with good credit ratings typically use debenture bonds extensively. Debenture bonds are unsecured bonds that are backed only by the creditworthiness and reputation of the issuer. Companies with strong credit ratings can issue debenture bonds at relatively low interest rates because investors have confidence in the company's ability to repay the debt. Callable bonds give the issuer the right to redeem the bond before maturity, and convertible bonds can be converted into equity shares, but these types of bonds may not be as commonly used by companies with strong credit ratings. Mortgage bonds are backed by specific assets, such as real estate, and may be used by companies in certain industries, but are not typically used extensively by companies with strong creditworthiness.

Companies with Good Credit Ratings Use ___________________ Bonds Extensively