a. Long-term bonds have fewer risks than short-term bonds. b. Long-term bonds have more risks associated with them, and bring in lower returns for the initial investment. c. While long-term bonds have more risks associated with them, they have the potential to bring in higher returns for the initial investment. d. Long-term bonds always have a higher return for the investment. Please select the best answer from the choices provided A B C D

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.