Fin Eco - 500 - Week 9

What is debt financing?

• Avoiding financing through debt

• Interest free debt finance

• Raising funds through loans

• Financing projects through equity

Which of the following are types of loans?

• Loan commitment and Line of credit

• Bond commitment and line of credit

• Loan commitment and cycle of credit

• Bond commitment and cycle of creidit

Which of the following are types of loan commitment?

• Fixed and flexible loan commitment

• Circulating and non-circulating

• Revolving and non-revolving

• Coupon and non-coupon loan commitment

For bonds, maturity refers to ... ?

• Bonds issued by mature companies

• When the face value is due to be repaid

• Bonds that are issued for longer than 10 years and become due

• Bonds that are issued for longer than 5 years and become due

When the bonds reach the final year, then which of the following are due to be repaid?

• Coupon only

• Face value only

• Coupon and face value only

• Neither coupon nor face value

Usually, the cost of capital should be .... ?

• Lower than the IRR

• Greater than the IRR

• Equal to the IRR

• None of these

Which of the following is NOT a type of bond?

• Floating rate bond

• Islamic bond

• Income bond

• Expense bond

A capital investment is one that?

• Has the prospect of long-term benefits

• Has the prospect of short-term benefits

• Is only undertaken by large corporations

• Applies only to investment in fixed assets

Issuing bonds/debts could be done through which of the following means?

• Public or private placements

• Public or local placements

• Local or private placements

• None of the above

The beta co-efficient is associated with?

• Risk-free rate of premium

• Dividend valuation model

• Capital Asset pricing model

• Tax adjusted cost of debt