A bond indenture is
A) a contract between the corporation issuing the bonds and the underwriters selling the bonds
B) the amount due at the maturity date of the bonds
C) a contract between the corporation issuing the bonds and the bondholders
D) the amount for which the corporation can buy back the bonds prior to the maturity date

Question

Quizplus · Accepted Answer

A bond indenture is a legal contract between the corporation issuing the bonds and the bondholders. It outlines the terms and conditions of the bond, including the interest rate, maturity date, and any other provisions that may apply. It also specifies the rights and responsibilities of both the issuer and the bondholders. The indenture is binding on both parties and creates a legal obligation for the issuer to make interest and principal payments to the bondholders as specified in the document.

A Bond Indenture Is