True or False. 1. If the amount of the bond payable is fully paid, together with the interest, the liability of the issuing entity ceases to exist. 2. Debt equity is raising capital through the creation of a liability. 3. In equity financing, there is debtor and creditor relationship.
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True or False.
1. If the amount of the bond payable is fully paid, together with the interest, the liability of the issuing entity ceases to exist.
2. Debt equity is raising capital through the creation of a liability.
3. In equity financing, there is debtor and creditor relationship.
4.
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- The difference between equity financing and debt financing is that A. equity financing involves borrowing money. B. equity financing involves selling part of the company. C. debt financing involves selling part of the company. D. debt financing means the company has no debt.Which of the following statements is false? A. Asset-backed securities (ABS) may be backed by financial assets other than mortgages. B. Residential mortgage-backed securities (RMBS) are backed by mortgages on income producing real estate properties. C. The securitization of financial assets increases the liquidity of the underlying financial assets. D. In a sequential-pay collateralized mortgage obligations (CMOs), all scheduled principal payments and prepayments are paid to each tranche in sequence until that tranche is paid off._ is not a primary source of long-term debt financing. A. Accounts payable B. Notes payable C. Leases D. Bonds.
- When a debtor is in financial difficulty and a current londer grants concessions to the debtor to refinance an existing debt arrangement, this is referred to as a O a. Troubled debt restructuring. O b. Debt extinguishment. O c. Debt modification. O d. Debt pay-off.Bonds that pay no interest unless the issuing company is profitable are called Select one: O a. income bonds. O b. collateral trust bonds. Oc revenue bonds. O d. debenture bonds.Multiple ChoiceIdentify the choice that best completes the statement or answers the question. 9. For a liability to exist, a. a past transaction or event must have occurred. b. the exact amount must be known. c. the identity of the party owed must be known. d. an obligation to pay cash in the future must exist. 10. The effective interest rate on bonds is higher than the stated rate when bonds sell a. at face value. b. above face value. c. below face value. d. at maturity value. 11. The effective interest rate on bonds is lower than the stated rate when bonds sell a. at maturity value. b. above face value. c. below face value. d. at face value. 12. When interest expense is calculated using the effective-interest amortization method, interest expense (assuming that interest is paid annually) always equals the a. actual amount of interest paid. b. book value of the…
- Debt financing can enable the return on assets to be greater than the return on equity True False uestionBonds can be an effective counterbalance in a portfolio heavily invested in stocks. True Falsewhat are two types of credit what is a security interest who is the debtor and creditor what happens if the debtor defaults what type of transaction requires a financing statement
- Please answer the following questions what are two types of credit what is a security interest who is the debtor and creditor what happens if the debtor defaults what type of transaction requires a financing statementThe following are examples of debt financing EXCEPT: a. Selling an ownership stake in the company b. Issue bonds repayable with interest c. Taking a loan from the bank d. Taking a loan from a family memberClassify the following items as (1) on-balance-sheet assets, (2) on-balance sheet liabilities, (3) offbalance-sheet assets, (4) off-balance-sheet liabilities, or (5) capital account. • Loan commitments. • Loan loss reserves. • Letter of credit. • Bankers acceptance. • Rediscounted bankers acceptance. • Loan sales without recourse. • Loan sales with recourse. • Forward contracts to purchase. • Forward contracts to sell. • Swaps. • Loan participations. • Securities borrowed. • Securities lent. • Loss adjustment expense account (PC insurers). • Net policy reserves