Where a corporation issues both debentures and mortgage bonds on its assets, an investor can expect its debentures to pay higher interest.

Name: Where a corporation issues both debentures and mortgage bonds on its assets, an investor can expect its debentures to pay higher interest.
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Debentures are generally unsecured and therefore carry a higher risk compared to mortgage bonds, which are secured by specific assets. To compensate for the higher risk, debentures typically offer a higher interest rate.

Where a Corporation Issues Both Debentures and Mortgage Bonds on Its