A corporation selling bonds to investors will often use a ________ to protect the bondholders' interests.

Question

Quizplus · Accepted Answer

A trust company is commonly used to protect the bondholders' interests. Trust companies are responsible for overseeing the payment of principal and interest to bondholders, ensuring that the terms of the bond agreement are being met, and taking action if there is a default on the bond. They act as an intermediary between the corporation issuing the bonds and the bondholders, and work to protect the interests of both parties. Chartered banks, credit unions, finance companies, and caisses populaire may also offer trust services, but it is not their primary function.

A Corporation Selling Bonds to Investors Will Often Use a ________