MGMT 200 - Chapter 9 Exam Questions Answered Correctly Rated A+
The two types of financing are
a. equity financing.
b. investing financing.
c. operating financing.
d. debt financing. - Answers a, d
Loans requiring periodic payments of interest and principle are referred to as ________ notes. -
Answers installment
A contract in which an owner provides a user the right to use an asset in return for periodic cash
payments over a period of time is called a(n)
a. lease.
b. contingent contract.
c. direct purchase plan.
d. indenture. - Answers a
Which of the following are correct regarding bonds?
a. They obligate the issuing company to repay the bonds at a specific date.
b. They obligate the issuing company to pay an estimated amount.
c. They obligate the issuing company to repay the bonds when market interest rates decrease.
d. They obligate the issuing company to pay a specific amount.
e. They obligate the issuing company to repay the bonds when interest rates increase. -
Answers a, d
In a private placement of bonds, bonds may be sold to
a. a single large investor.
b. an underwriter who sells it to individual investors.
c. the general public. - Answers a
Financing with ________ requires borrowing, whereas financing with ________ requires issuing
shares of stock. (Enter one word per blank.) - Answers debt, equity
, Periodic payments on installment notes typically include (Select all that apply.)
a. a portion that reduces the outstanding loan balance.
b. a portion that reflects interest.
c. an increase in stockholders' equity
d. installment fees. - Answers a, b
Which of the following are common characteristics or provisions of bonds?
a. convertible
b. secured or unsecured
c. perpetual or periodic
d. free or redeemable
e. callable - Answers a, b, e
A(n) ________ is a contractual arrangement in which an owner provides a user the right to use an
asset for a specified period of time. (Enter one word per blank) - Answers lease
Type of bond? bonds are backed by collateral - Answers secured
Type of bond? bonds are not backed by collateral - Answers unsecured
Type of bond? bond issue matures on a single date - Answers term
Type of bond? bond issue matures in installments - Answers serial
Type of bond? issuing company can pay off bonds early - Answers callable
Type of bond? investor can convert bonds to common stock - Answers convertible
A corporation that wishes to borrow from the general public rather than a bank will issue
a. notes payable.
b. common stock.
c. preferred stock.
d. bonds. - Answers a
Dorothea Inc. is selling all of its bonds to a large pension fund. This an example of a(n) ________
placement. - Answers private
The two types of financing are
a. equity financing.
b. investing financing.
c. operating financing.
d. debt financing. - Answers a, d
Loans requiring periodic payments of interest and principle are referred to as ________ notes. -
Answers installment
A contract in which an owner provides a user the right to use an asset in return for periodic cash
payments over a period of time is called a(n)
a. lease.
b. contingent contract.
c. direct purchase plan.
d. indenture. - Answers a
Which of the following are correct regarding bonds?
a. They obligate the issuing company to repay the bonds at a specific date.
b. They obligate the issuing company to pay an estimated amount.
c. They obligate the issuing company to repay the bonds when market interest rates decrease.
d. They obligate the issuing company to pay a specific amount.
e. They obligate the issuing company to repay the bonds when interest rates increase. -
Answers a, d
In a private placement of bonds, bonds may be sold to
a. a single large investor.
b. an underwriter who sells it to individual investors.
c. the general public. - Answers a
Financing with ________ requires borrowing, whereas financing with ________ requires issuing
shares of stock. (Enter one word per blank.) - Answers debt, equity
, Periodic payments on installment notes typically include (Select all that apply.)
a. a portion that reduces the outstanding loan balance.
b. a portion that reflects interest.
c. an increase in stockholders' equity
d. installment fees. - Answers a, b
Which of the following are common characteristics or provisions of bonds?
a. convertible
b. secured or unsecured
c. perpetual or periodic
d. free or redeemable
e. callable - Answers a, b, e
A(n) ________ is a contractual arrangement in which an owner provides a user the right to use an
asset for a specified period of time. (Enter one word per blank) - Answers lease
Type of bond? bonds are backed by collateral - Answers secured
Type of bond? bonds are not backed by collateral - Answers unsecured
Type of bond? bond issue matures on a single date - Answers term
Type of bond? bond issue matures in installments - Answers serial
Type of bond? issuing company can pay off bonds early - Answers callable
Type of bond? investor can convert bonds to common stock - Answers convertible
A corporation that wishes to borrow from the general public rather than a bank will issue
a. notes payable.
b. common stock.
c. preferred stock.
d. bonds. - Answers a
Dorothea Inc. is selling all of its bonds to a large pension fund. This an example of a(n) ________
placement. - Answers private
