Home / Questions / In the context of the reasons why entities borrow in the form of bond issues, which statem
In the context of the reasons why entities borrow in the form of bond issues, which statement is correct? Check all that apply.
1. Bond financing dilutes shareholder equity by reducing current shareholder ownership. This makes it difficult for companies to get aproval to raise funds through bond financing.
2. When U.S. Treasury yields are low and the spread between the Treasury and corporate bond yield is narrow, issuers can lock in low costs of borrowing through bond issues.
3. Because of covenants, issuers often find direct borrowing from a bank more restrictive than selling debt on the bond market.
4. When spreads are narrow, borrowers want to lock in low coupon payments for the long term; investors, however, prefer short and medium terms, to avoid losing income when interest rates rise.
5. When bonds issued by foreign governments offer higher yields than U.S. Treasury yields, corporate issuers in the U.S. get the opportunity to issue debt securities at low costs.
Dec 03 2019 View more View Less
Does “cost complementarities” exist for this firm? Explain your answer.2. Firm A is considering selling the subsidiary that produces product 2 to firm B, in which case it...
Apr 17 2021Find an initial solution to the following transportation problem. Το Calgary $18 From Mexico City Detroit Ottawa Demand Supply 100 Los Angeles $6 $17 $20 50 Panama City $...
Aug 22 2020Suppose 60 participants are enrolled in the main study. How much power would the study have to detect a 0.5-unit mean difference if a two-sided test is used with a signif...
Aug 01 2020As a part of an employment interview, you are given the partial income statement and selected financial ratios shown for Sneaky Pete s, a chain of western stores. Sneaky ...
Jun 22 2020The figure below depicts the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), and the long-run aggregate supply curve (LRAS) for the United St...
Feb 06 2020Find the distance from the point to the line through the points p and R where Q=(1,1,1).P-(1,2, -1), R=(2,0.3). 48 √24 a. d- b. d- 44 40 744 18 C d- d. d- V21 V24 f. d 20 V21
May 07 20215. There are 500 12th grade students in a high school. A total of 300 students are majoring in Sciences, while the rest are majoring in Social Studies. It is known that 7...
Apr 20 2021Provide TWO examples of effective use of âorganicâ labelling for products. Discuss why they are effective.
Jun 18 2021Does workforce diversity enhance organizational performance? Explain your answer.. Can an internal diversity program support an organization’s overall mission and vision? How?
Jul 09 2020When consumers are __________, observation becomes particularly useful in understanding consumers' preferences. A.unwilling to participate in researchB.confused by...
Dec 14 2019