Exam 10: Sources of Finance: Debt

When comparing debentures and unsecured notes,it can be said that:

Project finance is a method of raising long-term debt financing whereby funds are lent against the project's _____________.

Which of the following statements best describes a swap?

The size of a commercial paper program will depend on which of the following factors?

A bill either accepted or endorsed by a bank is referred to as a:

What is the implicit effective annual interest rate on a company transaction to raise $100 000 finance by drawing a commercial bill with face value of $105 000 payable in 180 days?

An advantage of interest rate swaps is the ability to:

Bridging finance is a long-term loan usually used to fund investments in large scale infrastructure.

Promissory notes have an advantage over commercial bills in that:

Unsecured notes are essentially the same as debentures,but differ in that holders rank above debenture holders for the repayment of debt.

Which type of debt ranks below other debt in the event that a company is wound up?

A company that issues debentures is required to draw up:

Why will banks permit the use of an overdraft as suitable for funding the purchase of inventory that will quickly be converted into cash?

An alternative to issuing a commercial bill is to:

The cost of a bank overdraft:

Which of the following statements with regards to fixed-rate term loans is false?

An ___________ is a form of short-term debt financing where the bank permits a company to runs its current account into deficit up to an agreed limit.

A non-bank bill may be more difficult to discount than a bank bill because:

The difference between commercial paper and a bill of exchange is that:

Nosam Ltd has just raised $100 million by an issue of 5 million converting preference shares.If each CPS converts into 20 ordinary shares on conversion,calculate the expected ordinary share price immediately prior to conversion.Assume the conversion discount is 5 per cent.