1 a company looking to issue debt instead of equity may want to consider debt due to 4313683

1 a company looking to issue debt instead of equity may want to consider debt due to 4313683

1.A company looking to issue debt instead of equity may want to consider debt due to favorable tax benefits.

a.True

b.False

2.Debt financing typically has a higher cost of capital than equity.

a.True

b.False

3.Small and medium-size companies typically have more difficulty attracting equity capital than debt capital.

a.True

b.False

4.An advantage of debt financing is that it decreases financial leverage.

a.True

b.False

5.Debenture bonds are only issued by companies with an excellent credit rating.

a.True

b.False

6.For bonds, yield rate is another term for nominal rate

a.True

b.False

7.For bonds, nominal rate is another term for contract rate.

a.True

b.False

8.Serial bonds come due in installments in periodic future dates.

a.True

b.False

9.Interest expense is less than the interest paid when a bond is issued for a premium.

a.True

b.False

10.The effective rate is less than the contract rate when bonds are issued at a discount.

a.True

b.False

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