3. Financing Terms. Fill in the blanks by choosing the appropriate term from the following list: lease, funded, floating-rate, eurobond, convertible, subordinated, call, sinking fund, prime rate, private placement, public issue, senior, unfunded, eurodollar rate, warrant, debentures, term loan. (LO4)

a. Debt maturing in more than 1 year is often called. debt.

b. An issue of bonds that is sold simultaneously in several countries is traditionally called a(n)

c. If a lender ranks behind the firm's general creditors in the event of default, the loan is said to be

d. In many cases a firm is obliged to make regular contributions to a(n). is then used to repurchase bonds.

e. Most bonds give the firm the right to repurchase or prices. which the bonds at specified

f. The benchmark interest rate that banks charge to their customers with good credit is generally termed the g. The interest rate on bank loans is often tied to short-term interest rates. These loans are usually called. h. Where there is a(n). loans. , securities are sold directly to a small group of institu- tional investors. These securities cannot be resold to individual investors. In the case of a(n) , debt can be freely bought and sold by individual investors. i. A long-term rental agreement is called a(n). j. A(n). k. A(n) predetermined price. bond can be exchanged for shares of the issuing corporation. - gives its owner the right to buy shares in the issuing company at a

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4. Financing Trends. True or false? Explain. (LO5) a. In several recent years, nonfinancial corporations in the United States have repurchased more stock than they have issued. b. A corporation pays tax on only 30% of the common or preferred dividends it receives from other corporations. c. Because of the tax advantage, a large fraction of preferred shares is held by corporations. 5. Preferred Stock. In what ways is preferred stock like long-term debt? In what ways is it like common stock? (LO4)