1. State 2 reasons why Net Present Value is a better decision criteria compared to other alternatives. 2. Why might a company prefer to issue secured bonds rather than unsecured bonds?

Q: Do you agree with the statement: "Investors view debt as a signal of firm value"? Why? Briefly…

A: Debt is the amount of money that is owed by an organization to a third party, that is, the amount of…

Q: Why might a company choose to raise money through bonds, rather than take out a note payable or…

A: Bonds are the long-term liability of the company where the company raises the money in lieu of…

Q: Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a…

A: Corporate Bond: Bonds issued by companies, whether they be public or private, are considered to be…

Q: In evaluating the cost of debt where a company has several issues       outstanding should the…

A: No, while calculating the cost of borrowing when companies have several obligations outstanding we…

Q: What is advantage of using bonds for financing instead of obtaining financing from the company's…

A: Debt financing is the process by which the business raises funds by offering the debt instruments.…

Q: Which theory of the term structure proposes that bonds of different maturities are not substitutes…

A: Holding money in the form of cash has the benefits of providing liquidity and meeting transactional…

Q: Finance What is the commonly used Excel model for bond valuation

A: Bonds are debt instruments. The issuing entity has to pay periodic interest to the bond holders.

Q: Why would a company wish to reduce its bond indebtedness before its bonds reach maturity? Indicate…

A:

Q: What are the more recently issued (and more frequently traded) bonds called? Why do investors favor…

A: The more recently issued (and more frequently traded) bonds are called Treasury Bonds which are…

Q: If the acquisition cost of investment in bonds is less than face amount, there is     discount…

A: Bonds are a less risky investment when compared to investments in equity stocks. The bonds are fixed…

Q: Having longer-maturity assets than liabilities causes banks to bear which of the following risks? I.…

A: a risk is an uncertain event that will occur or non-occurring and implies future uncertainty and…

Q: Who issues Bonds? Why should you own Bonds?  What are the risks of owning Bonds?

A: Bonds are the debt instrument issued to the bondholders of the organisation.

Q: (please all options information and correct answer) Decreases in the following factors that will…

A: A bond refers to a fixed-income investment instrument issued by governments, municipalities, or…

Q: One of several reasons that companies might choose to issue bonds is to shift their capital…

A: Bonds are the liability for the company and its issue increases the borrowings. Whereas, equity…

Q: Should financial institutions invest in junk bonds?

A: The answer for the theory question on junk bonds is discussed hereunder.  Dear student,  As you have…

Q: Explain what a unsecured debt, subordinated debt, senior debt is?   -is there risk in buying an…

A: Debt is the obligation that requires one party, the debtor to pay money to another party, the…

Q: True or false: The financial status of the issuer will affect the coupon rate that issuer pays on…

A: The coupon rate on a bond is a crucial element determined by various factors, reflecting the…

Q: Identify the following as either an advantage or a disadvantage of bond financing for a company.

A: A bond is a debt security or financial instrument that represents a loan made by an investor to a…

Q: If a company chooses the fair value option, a decrease in the fair value of its bonds because of the…

A: The fair value option is the alternative for a business to record its financial instruments at their…

Q: Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a…

A: Bond financing refers To the borrowing for the long term that is used by the state and local…

Q: Question 2) Issuing marketable securities is the primary way businesses finance their orperations.…

A: Marketable securities can be defined as those short term highly liquid securities which can be…

Q: Why would a company typically choose to source external financing by issuing bonds rather than…

A: Bonds are debt instruments that are used by institutions to raise capital. The face value and the…

Q: When selling bonds at a premium, the premium received effectively a.does not affect the cost of…

A: Premium means selling of bond at price higher than face value.