Which of the Following Statements Is Most Correct

Which of the following statements is most correct?

A) If a company increases its debt ratio, this is likely to reduce the default premium on its existing bonds.
B) All else equal, senior debt has less default risk than subordinated debt.
C) An indenture is a bond that is less risky than a subordinated debenture.
D) Statements a and c are correct.
E) All of the answers above are correct.

Correct Answer:

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