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C 6 - 9 9 . Sometimes it is not clear if a particular security is debt or equity. Suppose a corporation issues a perpetual

6 - 99 .

Sometimes it is not clear if a particular security is debt or equity. Suppose a corporation issues a perpetual

bond with interest payable solely from corporate income if

,

and only if

,

earned. Do you think this security is actually

debt or equity? What are the issues here?

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