If a corporation offers greater protection to a given class of bondholders, it must raise the interest rate on its bonds to make them more attractive.

Name: If a corporation offers greater protection to a given class of bondholders, it must raise the interest rate on its bonds to make them more attractive.
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Greater protection for bondholders typically reduces risk, allowing the corporation to offer a lower interest rate, as the bonds are already more attractive due to the added security.

If a Corporation Offers Greater Protection to a Given Class