Finance

Suppose the Canadian Space Agency has two mutually exclusive projects: landing a person on Mars and ...

Suppose the Canadian Space Agency has two mutually exclusive projects: landing a person on Mars and ...

[html]Suppose the Canadian Space Agency has two mutually exclusive projects: landing a person on Mars and landing a person on Venus. Project Mars has an IRR of 12% and project Venus has an IRR of 15%. The crossover rate is 9%. The project's appropria

bluejean   58   2 Replies

Anonymous

When Collingwood Corp. issued its 60-day commercial paper the promised yield was 9%, whereas the ...

When Collingwood Corp. issued its 60-day commercial paper the promised yield was 9%, whereas the ...

[html]When Collingwood Corp. issued its 60-day commercial paper the promised yield was 9%, whereas the 60-day T-bill yield was 6%. There is a 2% chance that Collingwood will default on this debt. If investors were willing to pay the full par value am

Septeos   47   1 Reply

Ranim_Saleem

List three sources of finance available to corporations in the money market. List one major ...

List three sources of finance available to corporations in the money market. List one major ...

List three sources of finance available to corporations in the money market. List one major advantage and one major disadvantage to each source

szehim2009   44   1 Reply

Sirangelou

Explain the implication of the failure of Lehman Brothers on short-term debt yields, and how it was ...

Explain the implication of the failure of Lehman Brothers on short-term debt yields, and how it was ...

Explain the implication of the failure of Lehman Brothers on short-term debt yields, and how it was remedied.

gringoboy6   48   1 Reply

lizwalker

You have observed that the credit ratings of firms are very stable over time. However, you have also ...

You have observed that the credit ratings of firms are very stable over time. However, you have also ...

[html]You have observed that the credit ratings of firms are very stable over time. However, you have also observed that the earnings of firms are cyclical. Explain how this is possible when credit ratings are supposed to reflect the credit risk of t

vnaust   51   1 Reply

rion20000

The Globe Theatre Company is negotiating a line of credit with a large bank. The bank is willing to ...

The Globe Theatre Company is negotiating a line of credit with a large bank. The bank is willing to ...

[html]The Globe Theatre Company is negotiating a line of credit with a large bank. The bank is willing to provide credit up to the minimum of 65% of the value of receivables or 70% of the inventory value. If the firm currently has receivables valued

lotusflwr   43   1 Reply

ggianola

Laurentide Resort Company would like to issue $100 million of commercial paper. Define liquidity ...

Laurentide Resort Company would like to issue $100 million of commercial paper. Define liquidity ...

Laurentide Resort Company would like to issue $100 million of commercial paper. Define liquidity support and describe why it would be important to investors.

jared8mp   27   1 Reply

yoyoguy

The 30-day T-bill rate is 5 percent. Toronto Skaters has just issued $100 million of commercial ...

The 30-day T-bill rate is 5 percent. Toronto Skaters has just issued $100 million of commercial ...

[html]The 30-day T-bill rate is 5 percent. Toronto Skaters has just issued $100 million of commercial paper at par. If the firm defaults, the commercial paper will be worth $5 million. The promised annual yield is 6.15 percent and the required rate o

jack103106   32   1 Reply

ydnam23

The 30-day T-bill rate is 5%. SWC Company has just issued $100 million of commercial paper at par. ...

The 30-day T-bill rate is 5%. SWC Company has just issued $100 million of commercial paper at par. ...

[html]The 30-day T-bill rate is 5%. SWC Company has just issued $100 million of commercial paper at par. There is a 0.1% chance the company will default on the issue. If the firm defaults, the commercial paper will be worth $5 million. Determine the

primewire   38   1 Reply

rbacon2

In determining its rating, DBRS looks at which of the following factors?

In determining its rating, DBRS looks at which of the following factors?

In determining its rating, DBRS looks at which of the following factors?

▸ core profitability

▸ business strength

▸ balance sheet strength

▸ strategy and management strength

▸ all of the above

luannamw86   35   1 Reply

crusherpsg

Is it possible for a company to have two debt issues with different debt ratings?

Is it possible for a company to have two debt issues with different debt ratings?

[html]Is it possible for a company to have two debt issues with different debt ratings?

▸ Yes, but only if the company is a multinational and the debt has been issued in different countries.

▸ No, the company's credit is the same for all bonds.

▸

pjw1979   35   1 Reply

catdaster

A bond referred to as a "high yield bond" is most likely

A bond referred to as a "high yield bond" is most likely

A bond referred to as a "high yield bond" is most likely

▸ of satisfactory credit quality.

▸ of speculative grade.

▸ of investment grade.

▸ of the highest credit quality.

tootsiebrowny   40   1 Reply

channy40

Use the following statements to answer this question:I.Debt rating should fluctuate with the ...

Use the following statements to answer this question:I.Debt rating should fluctuate with the ...

[html]Use the following statements to answer this question:
I.

frustelle   34   1 Reply

edatay

A junk bond is also known as

A junk bond is also known as

A junk bond is also known as

▸ a second mortgage.

▸ a subordinated unsecured bond.

▸ a high yield bond.

▸ a line of credit.

hliz3   37   1 Reply

ricyoung

Investment-grade debt rating refers to which of the following?

Investment-grade debt rating refers to which of the following?

[html]Investment-grade debt rating refers to which of the following?

▸ The issuer is likely to meet debt payment obligations.

▸ The issuer is less likely to meet debt payment obligations.

▸ The issuer is more likely to increase dividend payments.

onlineerica   41   1 Reply

fass

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

anhtuan   45   1 Reply

webmom2008

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

flemingpk   35   1 Reply

Chintan13

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.

mahan1994   38   1 Reply

armywahine

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

blankship   32   1 Reply

awbradshaw

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 ...

[html]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

▸ pur

zer0latency   33   1 Reply

gamblawc

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, debentu

apple321   31   1 Reply

daddyb1

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

tennisalex   44   1 Reply

raoulduk

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.

partygirl4u59   33   1 Reply

thomas1993

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

freckles   30   1 Reply

DNA_Helicase

A typical five-year revolving line of credit is characterized by

A typical five-year revolving line of credit is characterized by

[html]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 bec

CountrySlim84   35   1 Reply

djbo89

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 com

32264   34   1 Reply

brassgod

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

rolotony   41   1 Reply

moyo966

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.

jack103106   47   1 Reply

bcyber

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

greyfrost   45   1 Reply

nnenne

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

schweet   34   1 Reply

denitra31

The purpose of a covenant is

The purpose of a covenant is

[html]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 c

seraphel   34   1 Reply

rotatorro

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

supersour   42   1 Reply

durandal

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.

adriii0825   52   1 Reply

lpants

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 ...

[html]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

▸ canno

daogrady   36   1 Reply

choroni64

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

▸ lowe

remmylp   42   1 Reply

kamarie3

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

tennisalex   32   1 Reply

fs125

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 dolla

anuong05   80   1 Reply

sharonfaith31

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

ia45122   56   1 Reply

psstone42

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

RHCP12   52   1 Reply

ggyxxcool

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 ...

[html]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

Jennthejelly   28   1 Reply

toastercat