Which of the following statements is correct?
a)Stock is a form of debt capital
b)Stock must be repaid at maturity
c)Bonds are a form of debt capital
d)Bonds do not have to be repaid at maturity
IS C CORRECT ANSWER?THANK YOU:))))
http://www.wisegeek.com/what-is-debt-capital.htm
I think you're right.
C is right
Yes, statement C is the correct answer. Bonds are indeed a form of debt capital.
To determine the correct answer to this multiple-choice question, let's go through each statement one by one:
a) Stock is a form of debt capital: This statement is incorrect. Stock represents ownership in a company and is considered equity capital, not debt capital. Stockholders are not owed repayment, but instead, they have an ownership stake in the company.
b) Stock must be repaid at maturity: This statement is incorrect. As mentioned earlier, stock represents ownership in a company, and ownership does not need to be repaid. Stockholders bear the risk of fluctuations in the value of their shares but do not expect repayment of the initial investment.
c) Bonds are a form of debt capital: This statement is correct. Bonds are a type of debt instrument issued by corporations, governments, and other entities as a means of raising capital. When an entity issues a bond, it is borrowing money from investors and promising to repay the principal amount at maturity, along with periodic interest payments.
d) Bonds do not have to be repaid at maturity: This statement is incorrect. Bonds have a fixed maturity date, at which point the issuer is obligated to repay the principal amount to the bondholders. Until maturity, the issuer makes periodic interest payments to the bondholders.
Therefore, the correct answer is c) Bonds are a form of debt capital.