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FSI Final Exam Questions and Correct Answers/ Latest Update / Already Graded

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FSI Final Exam Questions and Correct Answers/ Latest Update / Already Graded

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FSI Final Exam Questions and Correct
Answers/ Latest Update / Already Graded
5 Types of Debt

Healthy -> Dead

Ans: 1. Investment Grade
2. High Yield (Junk, Levered)
3. Higher High Yield - Distress
4. Very High High Yield - Vulture
5. Bankruptcy


Circle of Life of Debt

Ans: Bad debt becomes equity of a new company


Raising capital tree map

Ans: - equity
---private
---public
------ipo
------green shoe


-debt

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---public issue
---quasi, 144A
---private placement
---syndicated bank loans


Public issues

Ans: - registered with the SEC


- public can buy


Quasi - 144A

Ans: allows for public selling of bonds of a company that cant
file paperwork to be public


Private Placements

Ans: not registered with SEC


insurance company driven


Syndicated Bank Loan

Ans: Investment Grade - sold to other commercial banks

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High Yield - sold to institutions


Liability Waterfall of B/S

Ans: Short Term Bank Borrowing (Commercial Paper)


Commercial Paper Outstanding


Sr Secured Debt


Sr Debentures


Sub Debentures


Preferred Stock


Common Equity


Commercial Paper

Ans: excess returns in market that AAA companies can borrow,


unsecured

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maturity > 1 yr


Commercial Paper Back Stop

Ans: credit support or backup funds for a financial instrument
or transaction


A1/P1 companies dont need it


A3 needs it because more likely to default


Major difference between financing with debt and equity

Ans: Rating Agencies


S&P/Fitch Rating vs Moodys Rating

Ans: S&P/Fitch


AAA
AA+
AA-
A


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