Question
Company X would like to issue bonds to finance the purchase of a new factory, but they are having financial difficulties, negatively impacting the credit
Company X would like to issue bonds to finance the purchase of a new factory, but they are having financial difficulties, negatively impacting the credit rating of their existing bonds. Which of the following options could they realistically have to issue new bonds at a favorable interest rate?
Group of answer choices
Issue bonds without promising any collateral, but market the fact that the new factory is projected to substantially increase profitability
Default on the existing bonds
Let the new bonds be senior to the old bonds
Pledge the new factory as collateral for the new bonds
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