Problem 1

Recently, which of the following sources of funds has played the greatest role in the financing of U.S. nonfinancial firms?

A. Internal funds B. Net equity issues C. Net borrowing D. All of the sources were approximately the same E. Government funds

Problem 4

In the United Sates, who holds the smallest portion of corporate equities?

A. Households B. Pension funds C. Insurance companies D. Foreign investors E. Mutual funds 

Problem 5

Exploitation of minority shareholders by majority shareholders is called:

A. A reverse stock split. B. Tunneling. C. Financial engineering. D. Proxy fighting. 

E. Seniority

Problem 6

40. The following are characteristics of preferred stock except: I) pays fixed dividends; II) can demand payments of cumulative dividends; III) has voting rights

A. I only B. I and II only C. III only D. I and III only E. II only 

Problem 7

41. Preference in repayment is called:

A. Seniority. B. Securitization. C. Time preference. D. Tunneling E. Absolute return. 

Problem 8

position

among

creditors

when it

comes to

Suppose a firm sets aside assets to protect particular investors. These assets are called:

A. Repurchased shares. B. Senior debt. C. Subordinated debt. D. Collateral. 

E. Time preference. 

Problem 9

Which of the following instruments gives the owner the right to purchase securities directly from the firm at a fixed price during a specified period of time?

A. Warrant B. Treasury stock C. Collateral D. Subordinated debt E. Short-term bank loan 

Problem 10

A corporate bond that can be exchanged for a fixed number of shares of stock is called a:

A. Callable bond. B. Debenture. C. Convertible bond. D. Warrant. E. Collateral.