Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock , senior, warrant. a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be ___. b. Interest on many bank loans is based on a of interest. c. A(n) _ bond can be exchanged for shares of the issuing corporation. d. A(n) _ gives its owner the right to buy shares in the issuing company at a predetermined price. e. Dividends on _ cannot be paid unless the firm has also paid any dividends on its ___.

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 14, Problem 1PS

Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant.

a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be _____.
b. Interest on many bank loans is based on a ____ of interest.
c. A(n) _____ bond can be exchanged for shares of the issuing corporation.
d. A(n) _____ gives its owner the right to buy shares in the issuing company at a predetermined price.
e. Dividends on _____ cannot be paid unless the firm has also paid any dividends on its _____.

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

After many sunset viewings at SUNY Brockport, Amanda dreams of owning a waterfront home on Lake Ontario. She finds her perfect house listed at $425,000. Leveraging the negotiation skills she developed at school, she persuades the seller to drop the price to $405,000. What would be her annual payment if she opts for a 30-year mortgage from Five Star Bank with an interest rate of 14.95% and no down payment? a- $25,938 b- $26,196 c- $24,500 d- $27,000

Imagine that the SUNY Brockport Student Government Association (SGA) is considering investing in sustainable campus improvements. These improvements include installing solar panels, updating campus lighting to energy-efficient LEDs, and implementing a rainwater collection system for irrigation. The total initial investment required for these projects is $100,000. The projects are expected to generate savings (effectively, the cash inflows in this scenario) of $30,000 in the first year, $40,000 in the second year, $50,000 in the third year, and $60,000 in the fourth year due to reduced energy and maintenance costs. SUNY Brockport’s discount rate is 8%. What is the NPV of the sustainable campus improvements? (rounded) a- $70,213b- $48,729c- $45,865d- $62,040

Imagine that the SUNY Brockport Student Government Association (SGA) is considering investing in sustainable campus improvements. These improvements include installing solar panels, updating campus lighting to energy-efficient LEDs, and implementing a rainwater collection system for irrigation. The total initial investment required for these projects is $100,000. The projects are expected to generate savings (effectively, the cash inflows in this scenario) of $30,000 in the first year, $40,000 in the second year, $50,000 in the third year, and $60,000 in the fourth year due to reduced energy and maintenance costs. SUNY Brockport’s discount rate is 8%. What is the NPV of the sustainable campus improvements? (rounded)a- $70,213b- $48,729c- $45,865d- $62,040

Answer 2

Textbook Question

Chapter 14, Problem 1PS

Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant.

a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be _____.
b. Interest on many bank loans is based on a ____ of interest.
c. A(n) _____ bond can be exchanged for shares of the issuing corporation.
d. A(n) _____ gives its owner the right to buy shares in the issuing company at a predetermined price.
e. Dividends on _____ cannot be paid unless the firm has also paid any dividends on its _____.

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 14, Problem 1PS

Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant.

a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be _____.
b. Interest on many bank loans is based on a ____ of interest.
c. A(n) _____ bond can be exchanged for shares of the issuing corporation.
d. A(n) _____ gives its owner the right to buy shares in the issuing company at a predetermined price.
e. Dividends on _____ cannot be paid unless the firm has also paid any dividends on its _____.

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 14, Problem 1PS

Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant.

a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be _____.
b. Interest on many bank loans is based on a ____ of interest.
c. A(n) _____ bond can be exchanged for shares of the issuing corporation.
d. A(n) _____ gives its owner the right to buy shares in the issuing company at a predetermined price.
e. Dividends on _____ cannot be paid unless the firm has also paid any dividends on its _____.

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Answer 8

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To fill in: The appropriate terminology.

Answer 12

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Answer 13

Ch. 14 - Terminology Fill in the blanks, using the...Ch. 14 - Prob. 2PS Ch. 14 - Sources of funds True or false? a. Net stock...Ch. 14 - Prob. 4PS Ch. 14 - Company ownership What do we mean when we say that...Ch. 14 - Prob. 6PS Ch. 14 - Prob. 7PS Ch. 14 - Prob. 8PS Ch. 14 - Corporate debt Which of the following features...Ch. 14 - Financial markets and intermediaries. True or...

Solution Summary: The author enumerates the terms used to describe subordinated loans, convertible bonds, warrants, and preferred stock dividends.

Concept explainers

Videos

Explanation of Solution

Want to see more full solutions like this?

Chapter 14 Solutions