Athelstone Realty issues debt with a maturity of 20 years. In the case of bankruptcy, holders of this debt may claim the property held by Athelstone Realty. Which of the following best describes this type of corporate debt?

Question

Quizplus · Accepted Answer

This type of corporate debt is a mortgage bond, which is secured by property held by the company. In the event of bankruptcy, holders of the bond may claim the property as collateral to recover their investment. A note is a shorter-term debt instrument, a debenture is an unsecured bond, and an asset-backed bond is secured by specific assets rather than property held by the company.

Athelstone Realty Issues Debt with a Maturity of 20 Years