1. Which of the following statements is TRUE?
2. I. Most debenture issues contain clauses restricting the company from issuing new debt with higher priority than existing debt.
3. II. When a firm conducts a subsequent debenture issue that has lower priority than its outstanding debt, the new debt is known as a subordinated debenture.
4. II is true.
5. Both I and II are true.
6. I is true.
7. Both I and II are not true.