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Which of the Following Best Describes the Financial Link Between

Question 24

Multiple Choice

Which of the following best describes the financial link between stockholders and bondholders?


A) The action of stockholders cannot affect the financial position of bondholders.
B) The action of stockholders can increase the risk of a business which will affect the financial position of bondholders.
C) The action of bondholders can increase the risk of a business which will affect the financial position of stockholders.
D) The actions of stockholders and bondholders are independent.
E) Both a. and c. are correct.

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