PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Chapter 24, Problem 22PS
Summary Introduction
To determine: The appropriate definition for the respective items.
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Check out a sample textbook solutionStudents have asked these similar questions
. Accounts receivable financing is the term used to describe which of the following types of loans that involve either the assignment or the factoring of a firm's accounts receivable?
A.
Secured short-term loan
B.
Unsecured short-term loan
C.
Secured long-term loan
D.
Unsecured long-term loan
E.
Trust receipt loan
match the correct term for each of the following descriptions.
Descriptions
Terms
Examples of these instruments include trade credit, accruals, short-term bank loans, and commercial paper.
Accruals
A document that provides evidence of the existence of a debt, and specifies the terms of the loan transaction.
Blanket lien
The cost of accounts payable paid before the expiration of the discount period.
Commercial paper
This financial instrument uses a borrowing firm’s entire inventory of low-priced, fast selling, and fungible products to secure a short-term loan, and allows the borrower to sell items from inventory without the lender’s permission.
Commitment fee
A fee charged by a financial institution providing a guaranteed, or revolving, line of credit, on the unused balance of a revolving line of credit.
Discount interest loan
A form of unsecured short-term financing used by large, extremely creditworthy business organizations.
Factoring
A financial…
Loans backed by a simple promise to repay are known as _____ loans.
open-end credit
revolving credit
securedu
nsecured
Chapter 24 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 24 - Bond terms Use Table 24.1 (but not the text) to...Ch. 24 - Bond terms Look at Table 24.1: a. The AMAT bond...Ch. 24 - Bond terms Select the most appropriate term from...Ch. 24 - Prob. 5PSCh. 24 - Bond terms Bond prices can fall either because of...Ch. 24 - Security and seniority a. As a senior bondholder,...Ch. 24 - Prob. 8PSCh. 24 - Prob. 9PSCh. 24 - Security and seniority a. Residential mortgages...Ch. 24 - Sinking funds For each of the following sinking...
Ch. 24 - Call provisions a. Look at Table 24.1. Suppose...Ch. 24 - Covenants Alpha Corp. is prohibited from issuing...Ch. 24 - Prob. 14PSCh. 24 - Private placements Explain the three principal...Ch. 24 - Convertible bonds True or false? a. Convertible...Ch. 24 - Convertible bonds Maple Aircraft has issued a 4%...Ch. 24 - Convertible bonds The Surplus Value Company had 10...Ch. 24 - Prob. 19PSCh. 24 - Convertible bonds Iota Microsystems 10%...Ch. 24 - Convertible bonds Zenco Inc. is financed by 3...Ch. 24 - Prob. 22PSCh. 24 - Prob. 23PSCh. 24 - Bank loans, commercial paper, and medium-term...Ch. 24 - Prob. 25PSCh. 24 - Tax benefits Dorlcote Milling has outstanding a 1...Ch. 24 - Convertible bonds This question illustrates that...Ch. 24 - Prob. 28PS
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- Which of the following is money kept by the firm with a bank in low-interest or non-interest bearing accounts as part of the loan agreement? A - short-term financing B- secured loans C- compensating balance D- line of creditarrow_forwarda loan, secured by a collateral, that the borrower is obliged to pay at specific terms. Loan Business Loan Consumers Loan O Mortgage SLIDESMANIA COMarrow_forwardWhich type of loan can seem to be funded by the mortgage broker when are not? a) A thrift institution loan Ob) A table-funded loan c) A credit union loan d) An FHA loanarrow_forward
- Bank Muscat advances secured and unsecured loans to their customers. If Bank Muscat is issuing secured loans, identify which one of the following is the reason for bank to issue secured loan? a. To increase interest on loans by the banks b. To sell the collateral in the event of non-refund of the loan c. To have long standing relationship with customer d. To reduce the loan amount and time periodarrow_forward25. The following are features of personal loans offered by banks except A. fixed repayment tenure B. online loan application C. loan amount depends on monthly income D. affordable monthly installmentarrow_forwardClassify the following items as (1) on-balance-sheet assets, (2) on-balance sheet liabilities, (3) offbalance-sheet assets, (4) off-balance-sheet liabilities, or (5) capital account. • Loan commitments. • Loan loss reserves. • Letter of credit. • Bankers acceptance. • Rediscounted bankers acceptance. • Loan sales without recourse. • Loan sales with recourse. • Forward contracts to purchase. • Forward contracts to sell. • Swaps. • Loan participations. • Securities borrowed. • Securities lent. • Loss adjustment expense account (PC insurers). • Net policy reservesarrow_forward
- Loan Servicing Companies.. O Collects monthly payments, remits to investor O Purchase loans on the secondary market O Decide on credit criteria for new loans O Underwrite home loansarrow_forwardCommercial loan agreements should contain which of the following: a. representations b. fees and charges c. means of repayment d. all of the above In order for the seller of securitized securities to remove the assets (i.e. mortgages) from the balance sheet, the sale must a. have a service agreement b. be overcollateralized c. be without recourse d. be made at a discount (original issue discount) Banks may deny creditworthy borrowers loan requests if a. they are non-corporate entities b. they are on late on paying taxes c. the loan is too risky d. they are individuals Chattel mortgages refer to a. a security agreement using corporate assets b. a security agreement using commercial equipment c. a security agreement using intangible property d. a security agreement using tangible personal propertyarrow_forwardWhat are the 5 Cs of credit that are sometimes used by bankers and others to determine whether a potential loan will be repaid?arrow_forward
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