Question
27) Why would a company issue debt rather than sell stock? a) Finance deficits b) Benefit from operating leverage c) Undertake growth d) All of
27) Why would a company issue debt rather than sell stock?
a) Finance deficits
b) Benefit from operating leverage
c) Undertake growth
d) All of the above
28) Which of the following is NOT true concerning the difference between bonds and
debentures?
a) Bonds are secured by assets
b) Debentures are secured by assets
c) Government of Canada bonds are not secured by assets
d) Debentures are based on creditworthiness
29) With a certain bond, the bondholder may select a second later maturity date. To what
what kind of debt does this refer?
a) Extendible debenture
b) Retractable bond
c) Instalment debenture
d) Variable rate bond
30) A Canadian company issued a bond in Germany which paid interest and the face
value at maturity in Deutsche marks (German currency). This is an example of a(n):
a) Domestic bond
b) Eurobond
c) Foreign bond
d) Euro-Canadian bond
31) Once a straight bond (regular bond) is issued, which component of the bond can
change?
a) The face value
b) The coupon rate
c) The term to maturity
a The maturity date
32) The holder of a Strip Bond receives no interest payments, instead, the strip is
purchased at a discount and mature at par.
a) True
b) False
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