1. How does collateral affect the interest rate on a bond? How does subordination affect the interest rate on a bond too? What else might affect the

1. How does collateral affect the interest rate on a bond? How does subordination affect the interest rate on a bond too? What else might affect the interest rate on a bond?

2. What is Chapter 7 liquidation and Chapter 11 reorganization? When should each be used? Please choose one company that has gone through either type of bankruptcy proceeding and describe the circumstances leading up to the filing.

Principals of Finance I

1How does collateral affect the interest rate on a bond?Collateral is an asset submitted to a lender as a security to obtain a loan. This loan calls forinterests to be paid in return as income...