Homework: Chapter 14 Assignment Score: 0 of 5 pts Instructor-created question Save 18 of 18 (16 complete) HW Score: 79.17%, 38 of 48 pts Question Help Bill and Edna had been married two years and had just reached the point where they had enough savings to start If a company goes bankrupt, what happens to the bonds it issued and the investors who bought them? investing. Bill's uncle Dave told them that he had recently inherited some very rare railroad bonds from his grandmother's estate. He wanted to help Bill and Edna get a start in the world and would sell them 50 of the bonds at $100 each. The bonds were dated 1873, beautifully engraved, showing a face value of $1,000 each. Uncle Dave pointed out that "United States of America" was printed prominently at the top and that the U.S governmenthad O B. The bonds are completely worthless and the investors lose their money established a sinking fund to retire the old railroad bonds. A sinking fund is a fund established for the purpose of repaying the debt. It allows the organization (the U.S government, in this example) to set aside money over time to retire the bonds. All Bill and Edna needed to do was hold on to them until the govemment contacted them, and they would eventually get the full S1,000 for each bond. Bill and Edna were overjoyed-until a year later when they saw the exact same bonds for sale at a coin and stamp shop priced as collectors' items for $9.95 each! | 0 A. If the bonds are unsecured, the bondholders will receive the value of the assets pledged to secure the bonds C. The investors may receive all or part of the bond's face value, if there are sufficient funds left after the O D. The investors may receive all or part of the bond's face value, if there are sufficient funds left after the If you purchase a bond and receive a bond certificate, it is safe to assume the bond is legitimate. bankruptcy court allocates funds to priority creditors. stockholders have received their investments back True False How can you assess the relative risk of a bond before purchasing it? O A. Use the debt ratio, debt-to-equity ratio and other similar financial ratios to assess the risk and financial position of the company B. Check the issuing company's bond ratings C. Compare the bond interest rate to the market interest rate D. All of the above