Exam 10: Sources of Finance: Debt

__________________ is the acceptance by the seller of a bill,in the secondary market,of responsibility to pay the face value if there is default by other parties to the transaction.

Which type of loan involves regular repayments which include principal and interest?

A bank bill:

With an effective annual interest rate of 10.04%,how much finance can a company raise by drawing a commercial bill with a face value of $100 000,maturing in 180 days?

An advantage of using debt is that:

The acceptance fee in relation to a commercial bill is the:

Which form of finance allows a company to raise funds by selling its accounts receivable?

Which of the following statements best describes the main difference(s)between corporate bonds and debentures?

A characteristic of redeemable preference shares is that:

In a bill discount facility:

The following statement is not a feature of negative pledge lending:

A revolving credit bill facility is:

A discounting agreement under which the discounter manages the company's debtors is known as:

Which of the following statements is false?

______________________ is a loan for general business purposes secured against the inventory of the borrower.

Converting preference shares offer a guaranteed price prior to a specified conversion date:

What is the price of a commercial paper with a face value of $100 000 and 120 days until maturity that is issued at a yield of 5% p.a.?

Which of the following statements is true?

Subordinated debt-holders will demand higher compensation than unsubordinated debt-holders because:

It is expected that the interest rates on debentures will be greater than on commercial bills because: