Q563
Bonds that do not pay original coupon payment but payment is made from additional bonds are classified as
A.
payment in-kind bonds
AnswerB.
payment off-kind bonds
C.
kind payment
D.
additional bond
Answer: Option A
Solution
Answer: Option A
Solution:
Bonds that do not pay original coupon payment but payment is made from additional bonds are classified as payment in-kind bonds. A payment-in-kind (PIK) bond is a type of bond that pays interest in additional bonds rather than in cash.