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FSI Final Exam Questions with Detailed Verified Answers
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
---public issue
---quasi, 144A
---private placement
---syndicated bank loans
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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
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
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Common Equity
Commercial Paper Ans: ✓ ✓ ✓ excess returns in market that AAA companies can borrow,
unsecured
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
.
.
.
BBB-
© Get it right 2025 Getaway - Stuvia US All rights reserved
FSI Final Exam Questions with Detailed Verified Answers
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
---public issue
---quasi, 144A
---private placement
---syndicated bank loans
© Get it right 2025 Getaway - Stuvia US All rights reserved
,Click here for more: Scholars nexus
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
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
© Get it right 2025 Getaway - Stuvia US All rights reserved
, Click here for more: Scholars nexus
Common Equity
Commercial Paper Ans: ✓ ✓ ✓ excess returns in market that AAA companies can borrow,
unsecured
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
.
.
.
BBB-
© Get it right 2025 Getaway - Stuvia US All rights reserved
