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Browse through our recently updated questions and discussion topics.
Evaluate the following statement:Private debt financing is generally cheaper than public financing.
Evaluate the following statement:Private debt financing is generally cheaper than public financing.
Evaluate the following statement:
Private debt financing is generally cheaper than public financing.

▸ True

▸ False

▸ Need additional information
Finance   anhtuan   19   webmom2008   3 days ago
The Winnipeg Curling Company currently has one issue of debt outstanding. Winnipeg Curling has ...
The Winnipeg Curling Company currently has one issue of debt outstanding. Winnipeg Curling has ...
[html]The Winnipeg Curling Company currently has one issue of debt outstanding. Winnipeg Curling has decided to borrow more money by issuing new debt with a higher priority in the event of bankruptcy. This could result in a violation of which type of covenant on the original debt?

▸ cross-default clause

▸ negative pledge

▸ The new issue will not violate any covenant as there are
Finance   flemingpk   16   Chintan13   3 days ago
Rank the following in order of priority in the event of bankruptcy:I.Subordinated, secured ...
Rank the following in order of priority in the event of bankruptcy:I.Subordinated, secured ...
[html]Rank the following in order of priority in the event of bankruptcy:
I.Subordinated, secured debt
Finance   mahan1994   19   armywahine   3 days ago
Private financing is advantageous because
Private financing is advantageous because
Private financing is advantageous because

▸ it is filed with the provincial securities commissions.

▸ there are more restrictive covenants.

▸ the firm is required to provide a detailed prospectus.

▸ none of the above
Finance   blankship   13   awbradshaw   3 days ago
North American Bat Experts Company (NABE) has just sold a batting machine to a Jamaican cricket ...
North American Bat Experts Company (NABE) has just sold a batting machine to a Jamaican cricket ...
North American Bat Experts Company (NABE) has just sold a batting machine to a Jamaican cricket team. The team will pay for the machine by borrowing the money from NABE and securing the loan using the machine. This type of debt is called

▸ purchase-money mortgage.

▸ acceptance.

▸ line of credit.

▸ debenture.
Finance   zer0latency   14   gamblawc   3 days ago
Which of the following statements is correct?
Which of the following statements is correct?
[html]Which of the following statements is correct?

▸ Mortgage bonds and debentures do not differ because they are both debt.

▸ Debentures are secured by claims on specific real assets while mortgages are not.

▸ In the event of bankruptcy, debenture holders get paid after the claims of preferred shareholders.

▸ Mortgages are secured by claims on specific real assets while debent
Finance   apple321   7   daddyb1   3 days ago
When specific assets such as land, plant, or equipment are pledged as collateral, what is the term ...
When specific assets such as land, plant, or equipment are pledged as collateral, what is the term ...
When specific assets such as land, plant, or equipment are pledged as collateral, what is the term for the debt issue?

▸ bond

▸ mortgage bond

▸ debenture

▸ unsecured debt
Finance   tennisalex   17   raoulduk   3 days ago
Junk bonds are
Junk bonds are
Junk bonds are

▸ corporate bonds of bankrupt companies.

▸ subordinated debentures.

▸ speculative bonds with ratings below investment grade.

▸ a nickname for bonds traded in the Hong Kong market.
Finance   partygirl4u59   16   thomas1993   3 days ago
Which of the following is secured by the assets of a firm?
Which of the following is secured by the assets of a firm?
Which of the following is secured by the assets of a firm?

▸ a fixed interest rate loan

▸ asset-backed commercial paper (ABCP)

▸ a debenture

▸ all of the above
Finance   freckles   9   DNA_Helicase   3 days ago
A typical five-year revolving line of credit is characterized by
A typical five-year revolving line of credit is characterized by
A typical five-year revolving line of credit is characterized by

▸ a fixed interest rate for the five years.

▸ a floating interest rate, renewed periodically during the five-year term.

▸ an interest rate that is lower than the prime rate because these lines of credit are only offered to the most creditworthy firms.

▸ B and C
Finance   CountrySlim84   15   djbo89   3 days ago
Which one of the following does NOT explain why banks enjoy lower asymmetry of information?
Which one of the following does NOT explain why banks enjoy lower asymmetry of information?
[html]Which one of the following does NOT explain why banks enjoy lower asymmetry of information?

▸ The company is required by law to give the bank access to privileged information.

▸ The bank has access to the firm's financial activity.

▸ The company relies on the bank for financing and other hedging activities.

▸ The company provides information to negotiate banking products.[
Finance   32264   13   brassgod   3 days ago
Which of the following is the least important for assessing the company's profile for purposes of a ...
Which of the following is the least important for assessing the company's profile for purposes of a ...
Which of the following is the least important for assessing the company's profile for purposes of a line of credit?

▸ current ratio

▸ price to earnings ratio

▸ receivables turnover

▸ debt to equity ratio
Finance   rolotony   10   moyo966   3 days ago
In general a "floating rate" on a debt issue refers toI.variable payment times for the interest ...
In general a "floating rate" on a debt issue refers toI.variable payment times for the interest ...
[html]In general a "floating rate" on a debt issue refers to
I.variable payment times for the interest payments.
Finance   jack103106   14   bcyber   3 days ago
In general, a line of credit has a ________ maturity while a term loan has a ________ maturity.
In general, a line of credit has a ________ maturity while a term loan has a ________ maturity.
In general, a line of credit has a ________ maturity while a term loan has a ________ maturity.

▸ fixed; floating

▸ floating; floating

▸ floating; fixed

▸ fixed; fixed
Finance   greyfrost   14   nnenne   3 days ago
Which of the following is an example of a covenant?
Which of the following is an example of a covenant?
Which of the following is an example of a covenant?

▸ no requirement to limit dividend payments

▸ requirement to maintain a maximum level of net worth

▸ requirement to maintain a minimum level of current ratio

▸ All of the above
Finance   schweet   13   denitra31   3 days ago
The purpose of a covenant is
The purpose of a covenant is
The purpose of a covenant is

▸ to protect the borrower in the event of default by the lender.

▸ to protect the borrower in the event of increasing product market competition.

▸ to protect the borrower in the event of a deterioration of the credit quality of the lender.

▸ to protect the lender in the event of default by the borrower.
Finance   seraphel   13   rotatorro   3 days ago
Short-term debt securities that are unsecured obligations issued by corporations are called
Short-term debt securities that are unsecured obligations issued by corporations are called
Short-term debt securities that are unsecured obligations issued by corporations are called

▸ debentures.

▸ Treasury bills.

▸ commercial paper.

▸ All of the above
Finance   supersour   20   durandal   3 days ago
Use the following statements to answer this question:I.The major implication of backing money market ...
Use the following statements to answer this question:I.The major implication of backing money market ...
[html]Use the following statements to answer this question:
I.The major implication of backing money market funds with risky assets is an
Finance   adriii0825   19   lpants   3 days ago
The issuer of bankers' acceptances is paying a promised yield of 5%. What would be the promised ...
The issuer of bankers' acceptances is paying a promised yield of 5%. What would be the promised ...
The issuer of bankers' acceptances is paying a promised yield of 5%. What would be the promised yield on securities of the bank guaranteeing this issue?

▸ equivalent or less than 5%

▸ higher than 5%

▸ depends on the bank's liquidity

▸ cannot be determined
Finance   daogrady   15   choroni64   3 days ago
The promised yield on bankers' acceptances is typically ________ than the promised yield on the ...
The promised yield on bankers' acceptances is typically ________ than the promised yield on the ...
[html]The promised yield on bankers' acceptances is typically ________ than the promised yield on the commercial paper of similar firms because ________.

▸ higher; the banks that guarantee the debt are more creditworthy than the issuing firm

▸ lower; banks charge a fee to accept or guarantee the debt

▸ lower; the banks that guarantee the debt are more creditworthy than the issuin
Finance   remmylp   21   kamarie3   3 days ago
Bond rating services
Bond rating services
Bond rating services

▸ classify Government of Canada bonds as nearly default risk free.

▸ can affect bond prices by the ratings they give.

▸ evaluate credit or default risk.

▸ all of the above
Finance   tennisalex   14   fs125   3 days ago
Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to ...
Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to ...
[html]Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to maturity. There is a 3% probability that the firm will default on the issue and the investor will receive $40 million (or 40 cents on the dollar). The investor's required rate of return is 5%. If the firm wishes to issue the commercial paper at par, the promised yield must be

Finance   anuong05   26   sharonfaith31   3 days ago
Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to ...
Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to ...
[html]Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to maturity. There is a 1% probability that the firm will default on the issue and the investor will receive zero. The investor's required rate of return is 5%. If the firm wishes to issue the commercial paper at par, the promised yield must be

▸ 5%.

▸ 42.27%.

▸ 8.25%.

▸ 17.17
Finance   ia45122   19   psstone42   3 days ago
Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to ...
Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to ...
[html]Saskatchewan Wheat Fields Inc. is planning to issue $100 million of commercial paper with 30 days to maturity. The quoted rate for the issue is 8%. There is a 3% probability that the firm will default on the issue and the investor will receive zero. If the investor's required rate of return is 5%, then the value of the issue is

▸ $99.59 million.

▸ $100 million.

▸ $99.77 mil
Finance   RHCP12   27   ggyxxcool   3 days ago
Laurentide Resorts is issuing commercial paper with 60 days to maturity. In case of default, the ...
Laurentide Resorts is issuing commercial paper with 60 days to maturity. In case of default, the ...
Laurentide Resorts is issuing commercial paper with 60 days to maturity. In case of default, the investor will receive 40 cents on the dollar. The quoted rate for the issue is 7%, and an equivalent government-backed security's rate is 6%. What is the probability of default?

▸ 1.0%

▸ 1.49%

▸ 0.94%

▸ 98.51%
Finance   Jennthejelly   10   toastercat   3 days ago
Laurentide Resorts is issuing commercial paper with 60 days to maturity. In case of default, the ...
Laurentide Resorts is issuing commercial paper with 60 days to maturity. In case of default, the ...
Laurentide Resorts is issuing commercial paper with 60 days to maturity. In case of default, the investor will lose the total amount. The quoted rate for the issue is 7%, and an equivalent government-backed security's rate is 6%. What is the probability of default?

▸ 1%

▸ 99.06%

▸ 0.93%

▸ 0%
Finance   itpf04   9   neginakbarin   3 days ago
A Government of Canada T-bill with a face value of $1,000 and 45 days to maturity is trading for ...
A Government of Canada T-bill with a face value of $1,000 and 45 days to maturity is trading for ...
A Government of Canada T-bill with a face value of $1,000 and 45 days to maturity is trading for $985.22. The 45-day interest rate is ________ and the annual rate is ________.

▸ 1.5%; 12.17%

▸ 1.5%; 12.84%

▸ 12.17%; 1.5%

▸ 12.84%; 1.5%
Finance   futurenurse15   16   kinnigit   3 days ago
T-bill yields are quoted on a(n) ________ basis.
T-bill yields are quoted on a(n) ________ basis.
T-bill yields are quoted on a(n) ________ basis.

▸ discount

▸ compound interest

▸ after-tax

▸ none of the above
Finance   youngbloodz   8   micapiro   3 days ago
A Treasury bill (T-bill) is a ________ issued by ________.
A Treasury bill (T-bill) is a ________ issued by ________.
A Treasury bill (T-bill) is a ________ issued by ________.

▸ short-term promissory note; a government treasury department

▸ bond; the government of Canada

▸ short-term promissory note; high quality Canadian firms

▸ bond; high quality Canadian firms
Finance   Septeos   13   majudomminick   3 days ago
Which of the following is characterized as an unsecured money market instrument?
Which of the following is characterized as an unsecured money market instrument?
Which of the following is characterized as an unsecured money market instrument?

▸ Commercial paper

▸ Debentures

▸ Treasury bill

▸ All of the above

▸ A and C
Finance   kitkat867   8   Gimor1220   3 days ago
Generally, any debt instrument with a maturity of less than one year is called a ________, from one ...
Generally, any debt instrument with a maturity of less than one year is called a ________, from one ...
Generally, any debt instrument with a maturity of less than one year is called a ________, from one to seven years is called a ________, and more than seven years is called a ________.

▸ bond; bill; note

▸ bill; bond; note

▸ bill; note; bond

▸ note; bill; bond
Finance   ryanolson41   14   rector   3 days ago
Use the following statements to answer this question:I.Tax deductibility of dividends makes equity ...
Use the following statements to answer this question:I.Tax deductibility of dividends makes equity ...
[html]Use the following statements to answer this question:
I.Tax deductibility of dividends makes equity very desirable.
Finance   32264   4   yoliness   3 days ago
Laurentide Ski Resort has to make a choice between two different debt issues. Issue 1 has an ...
Laurentide Ski Resort has to make a choice between two different debt issues. Issue 1 has an ...
[html]Laurentide Ski Resort has to make a choice between two different debt issues. Issue 1 has an interest rate of 5% and the interest is tax deductible. Issue 2 has an interest rate of 4% however the interest is not tax deductible. If the firm has a tax rate of 40%, which issue is preferred and why?

▸ Issue 2 because the after-tax cost is 1.6% while the after-tax cost of Issue 1
Finance   nevermind11111   9   studytime   3 days ago
Montreal Snowmobiles has issued bonds at par that are paying 10% interest per year. The firm has a ...
Montreal Snowmobiles has issued bonds at par that are paying 10% interest per year. The firm has a ...
Montreal Snowmobiles has issued bonds at par that are paying 10% interest per year. The firm has a tax rate of 40%. What is the firm after-tax cost of debt?

▸ 6%

▸ 14%

▸ 7%

▸ 10%
Finance   mhbtelc   13   otis24   3 days ago
Toronto Skaters has issued $100 million in bonds paying 6% interest per year. The firm has a tax ...
Toronto Skaters has issued $100 million in bonds paying 6% interest per year. The firm has a tax ...
Toronto Skaters has issued $100 million in bonds paying 6% interest per year. The firm has a tax rate of 45%. The firm's annual interest payments are ________ and the after-tax cost of the debt is ________ per year.

▸ $6 million; $2.7 million

▸ $6 million; $3.3 million

▸ $3.3 million; $2.7 million

▸ $6 million; $6 million
Finance   wasala18   14   stanka82   3 days ago
Which of the following represents tax-deductible expenses?I.Rental on office buildingII.Interest ...
Which of the following represents tax-deductible expenses?I.Rental on office buildingII.Interest ...
[html]Which of the following represents tax-deductible expenses?
I.Rental on office building
Finance   kickergb40   11   rbacon2   3 days ago
The Canada Revenue Agency uses which of the following tests to make sure that the interest on debt ...
The Canada Revenue Agency uses which of the following tests to make sure that the interest on debt ...
The Canada Revenue Agency uses which of the following tests to make sure that the interest on debt is tax deductible?

▸ Interest is compensation for the use or retention of money owed to another.

▸ Interest accrues from day to day.

▸ Interest must be referable to a principal sum.

▸ All of the above
Finance   SHABBA027   17   denitra31   3 days ago
Which of the following has the characteristics of a fixed contractual commitment?
Which of the following has the characteristics of a fixed contractual commitment?
Which of the following has the characteristics of a fixed contractual commitment?

▸ common share dividends

▸ retained earnings

▸ long-term debt

▸ preferred share
Finance   aryaelfkind   12   xueli   3 days ago
The little company you and your friend started in your parents' garage has grown so much that you ...
The little company you and your friend started in your parents' garage has grown so much that you ...
[html]The little company you and your friend started in your parents' garage has grown so much that you are now ready to take the firm public. In your discussions with one of the top investment dealers, you have been given a choice between two alternatives:
Plan I: The investment dealer will underwrite the issue of 1 million shares at $14 per share. There will be an underwritin
Finance   johnnyappleseed   21   hannahfeng   3 days ago
Describe a potential conflict of interest that may arise when an investment dealer underwrites a new ...
Describe a potential conflict of interest that may arise when an investment dealer underwrites a new ...
Describe a potential conflict of interest that may arise when an investment dealer underwrites a new equity issue on a bought deal basis.
Finance   sunkiss22   18   prospectjay   3 days ago
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