1. What types of debt covenants might managers consider?

2. What are the major factors that affect the cost or interest rate of a debt instrument?

3. What are term loans, and what are their characteristics?

4. What are syndicated loans and what are the primary applications?

5. What are some of the legal arrangements used to protect lenders related to corporate bonds?

6. What are some of the general features of corporate bonds?

7. What are the options available for a firm that wishes to avoid a large single repayment of principal in the future or to refund a bond prior to maturity?

8. In what ways are leases similar to long-term debt?

9. What are the 2 basic types of leases?

10. What are the advantages and disadvantages of leasing?

The CFO of your firm asks you to review the long-term debt position of the company to decide if the company should make any changes in its borrowing arrangements. Before conducting this review you decide to bring yourself up to date on terminology and types of long-term borrowing arrangements. Therefore, as a start you decide to answer the following questions.