Which of these statements about corporate bonds is correct?

1. Which of these statements about corporate bonds is
correct? . Which of these statements about corporate bonds is
correct? A. Bonds provide equity financing. B. Bonds are like IOUs with a promise to repay the amount
borrowed, with interest, on a certain date. C. Debenture bonds require assets pledged as collateral. D. Issuing new bonds dilutes the existing ownership in the
firm. 2. Purchasing insurance, paying employees, and selling
goods on credit are all examples of financial
transactions. 2. Purchasing insurance, paying employees, and selling
goods on credit are all examples of financial
transactions. T / F 3. Costs of Goods Sold are the expenses of running a
business that are not directly related to producing the products it
will be selling. 3. Costs of Goods Sold are the expenses of running a
business that are not directly related to producing the products it
will be selling. T / F 4. Venture capitalists provide a source of debt
financing and usually charge high interest for loans because of the
high risk of the enterprises they finance. 4. Venture capitalists provide a source of debt
financing and usually charge high interest for loans because of the
high risk of the enterprises they finance. T / F

1. Which of these statements about corporate bonds is
correct?
Option B is correct.
Bonds are like IOUs with a promise to repay the amount borrowed,
with interest, on a certain date.
Bonds are debt instruments, in which the issuer will have an
obligation to pay interest at regular intervals and repay the
principal amount at maturity.
A. Bonds provide equity financing. Incorrect because Bonds
provide DEBT financing.
C. Debenture bonds require assets pledged as collateral.
Incorrect Debentures are unsecured loans.
D. Issuing new bonds dilutes the existing ownership in the firm.
Incorrect issuing new equity dilutes the existing ownership in the
firm.
2. Purchasing insurance, paying employees, and selling
goods on credit are all examples of financial
transactions.
FALSE
These are examples of operating transactions, not fiancial
transactions.
Financial transactions include issuing bond, issuing equity,
share repurchase etc.
3. Costs of Goods Sold are the expenses of running a
business that are not directly related to producing the products it
will be selling.
FALSE
Cost of Goods Sold are directly related to producing the
product.
4. Venture capitalists provide a source of debt
financing and usually charge high interest for loans because of the
high risk of the enterprises they finance.
FALSE
Venture capitalists provide a source of EQUITY financing and
usually demand a very high portion of the company for a small
equity.
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