Notes It Pm
Long Term Debt and Lease Financing - Review
<< Back to Long Term Debt and Lease Financing - Chapter 16
1) Corporate debt has increased rapidly since World War II.
2) The greater use of debt by corporations since the late 1960s is best shown by the declining interest coverage ratio.
3) The main causes for the increase in corporate debt in America is rapid business expansion, inflationary impacts, and inadequate internally-raised funds.
4) The term debenture refers to long-term, unsecured debt.
5) The document that outlines the covenants and duties existing between bondholders and the issuing corporation is called an indenture.
6) Bonds that offers the most security to the bondholder are senior mortgage bonds.
7) An indenture is the contract between a corporation and a trustee acting for bondholders.
8) A debenture represents unsecured debt.
9) Common stock is the lowest in priority of claims against a bankrupt firm.
10) Many bonds have some orderly, preplanned, alternative system of repayment. Examples are sinking funds and serial bonds.
11) A serial bond repayment plan involves a series of installments to retire the debt over the life of the issue.
12) Senior secured debt, subordinated debentures, and common stock best represents the hierarchy of creditor and stockholder claims.
13) A "subordinated debenture" is an unsecured bond with an inferior claim on assets in the event of liquidation.
14) Debentures, preferred stock, and common stock properly represents the hierarchy of creditor and stockholder claims.
15) A call provision, which allows the corporation to force an early maturity on a bond issue, usually contains the following characteristics: most bonds must be outstanding at least 5 years before being called. After the call date, the call premium tends to decline over time. The corporation will pay a premium over par for the bonds.
17) A bond with a call provision would generally be sold to yield more
<< Back to Long Term Debt and Lease Financing - Chapter 16
1) Corporate debt has increased rapidly since World War II.
2) The greater use of debt by corporations since the late 1960s is best shown by the declining interest coverage ratio.
3) The main causes for the increase in corporate debt in America is rapid business expansion, inflationary impacts, and inadequate internally-raised funds.
4) The term debenture refers to long-term, unsecured debt.
5) The document that outlines the covenants and duties existing between bondholders and the issuing corporation is called an indenture.
6) Bonds that offers the most security to the bondholder are senior mortgage bonds.
7) An indenture is the contract between a corporation and a trustee acting for bondholders.
8) A debenture represents unsecured debt.
9) Common stock is the lowest in priority of claims against a bankrupt firm.
10) Many bonds have some orderly, preplanned, alternative system of repayment. Examples are sinking funds and serial bonds.
11) A serial bond repayment plan involves a series of installments to retire the debt over the life of the issue.
12) Senior secured debt, subordinated debentures, and common stock best represents the hierarchy of creditor and stockholder claims.
13) A "subordinated debenture" is an unsecured bond with an inferior claim on assets in the event of liquidation.
14) Debentures, preferred stock, and common stock properly represents the hierarchy of creditor and stockholder claims.
15) A call provision, which allows the corporation to force an early maturity on a bond issue, usually contains the following characteristics: most bonds must be outstanding at least 5 years before being called. After the call date, the call premium tends to decline over time. The corporation will pay a premium over par for the bonds.
17) A bond with a call provision would generally be sold to yield more