A bond that pays interest only when a firm has sufficient earnings to cover the interest payments is called a(n):

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An income bond is a type of bond that pays interest only when the issuing company has enough earnings to cover the interest payments. This type of bond is considered riskier than traditional bonds because there is no guarantee of interest payments, but it may be attractive to investors looking for a potentially higher yield. Callable, putable, convertible, and indexed bonds all have different features and do not fit the description of a bond that only pays interest based on earnings.

A Bond That Pays Interest Only When a Firm Has