B2J Long Term Financing Quiz

Which of the following financing methods involves issuing new shares to existing shareholders at a discount?

• Initial Public Offering (IPO)

• Rights Offering

• Private Placement

• Bonus Issue

What is a distinguishing feature of preference shares compared to common stock?

• Voting rights

• Fixed dividends

• Higher risk

• No priority in asset claims

Which type of company is more likely to raise funds in a public equity market?

• Start-up companies

• Companies experiencing financial trouble

• Big successful and established companies

• Small family-owned businesses

Which type of lease allows the lessee to cancel the lease if the equipment is no longer needed or obsolete?

• Operating Lease

• Finance Lease

• Sales and Leaseback

• Venture Capital

What is a key characteristic of common stock?

• Fixed interest payments

• Voting rights

• Priority in asset claims

• No risk of dilution

Which type of bond is backed only by the credit and goodwill of the issuer, not by assets?

• Secured bond

• Debenture

• Subordinated bond

• Income bond

Which of the following is a type of direct equity investment?

• Bonds

• Ordinary shares

• Loan stock

• Sukuk

Which of the following is a feature of Sukuk compared to conventional bonds?

• It is a debt obligation

• It provides regular periodic income

• It is tradable in the secondary market

• It represents ownership interest in an underlying asset

Which of the following is a characteristic of redeemable preference shares?

• They can be converted into ordinary shares at a specified price

• They have no fixed dividend payments

• They can be redeemed by the company at its discretion

• They provide voting rights to the holders

Which of the following is true about dividends for common stockholders?

• They are a liability of the company

• They are paid at the discretion of the Board of Directors

• They are tax-deductible

• They are guaranteed payments