Which of the following terms refers to the use of debt financing?

Related Mcqs:

1. Which of the following is the cheapest source of financing available to a firm?

   A. Bank loan
   B. Commercial papers
   C. Trade credit
   D. None of the given options.

2. A major facet of financial management involves providing the financing necessary to support:

   A. Liabilities
   B. Debts
   C. Loans
   D. Assets

3. ___________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind.

   A. Financial management
   B. Profit maximization
   C. Agency theory
   D. Social responsibility

4. Which one of the following terms refers to the risk arises for bond owners from fluctuating interest rates?

   A. Fluctuations Risk
   B. Interest Rate Risk
   C. Real-Time Risk
   D. Inflation Risk

5. Which of the following statement is TRUE regarding debt?

   A. Debt is an ownership interest in the firm.
   B. Unpaid debt can result in bankruptcy or financial failure.
   C. Debt provides the voting rights to the bondholders.
   D. Corporation’s payment of interest on debt is fully taxable.

6. _______________refers to the extent to which fixed-income securities (debt and preferred stock) are used in a firm’s capital structure?

   A. Financial risk
   B. Portfolio risk
   C. Operating risk
   D. Market risk

7. Rate on debt that increases as soon market rises is classified as________?

   A. Rising bet rate
   B. Floating rate debt
   C. Market rate debt
   D. Stable debt rate

8. Rate of return which is required to satisfy stockholders and debt holders is classified as__________?

   A. Weighted average cost of interest
   B. Weighted average cost of capital
   C. Weighted average salvage value
   D. Mean cost of capital

9. The value of option issued to call debt is $780 and return rate on callable bond is $370 then return rate on non-callable bond is ___________?

   A. 1250
   B. 1150
   C. 1350
   D. 410

10. The value of option issued to call debt is $670 and return rate on callable bond is $540 then return rate on non-callable bond is ____________?

    A. 1210
    B. 1010
    C. 130
    D. 1020