Rollins,Inc. Mat Rollins,CEO of Rollins,Inc.,decided that upon his retirement,he would elect his son Chris to become the new CEO.Mat thought it would be a good idea to have Chris shadow him at work to understand the roles and responsibilities of a CEO.Chris shadowed his father for months in order to learn every aspect of the business.Mat knew that the best way for Chris to learn was to actually perform some of the tasks he did on a daily basis,rather than simply describe them.The company generally focused on short-term financing,and Mat felt that it was important for Chris to understand the different types of financing.Chris learned about the type of bonds that the company usually offered to raise capital.These bonds allow the purchasers of the bond to keep them until maturity.Chris also learned the process of obtaining bonds and the various types of long-term financing methods.Job shadowing was indeed a worthwhile experience for Chris.
-Refer to Rollins,Inc.At one point,Chris was not sure about which type of bond was backed only by the reputation of the issuing corporation.Which of the following would you suggest?
A) Mortgage bond
B) Convertible bond
C) Debenture bond
D) Registered bond
E) Corporate bond

Question

Quizplus · Accepted Answer

A debenture bond is backed only by the reputation of the issuing corporation, whereas other types of bonds may have additional guarantees such as a mortgage or registration with a financial securities agency. Therefore, a debenture bond is the most appropriate option for a bond that is only backed by the reputation of the issuing corporation.