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If a Company Is Relying on Borrowing and Credit Too

question 35

Multiple Choice

If a company is relying on borrowing and credit too extensively,this will probably be reflected in the _____.


Definitions:

Par Value

The stated value of a bond, stock share, or coupon as declared by the issuer.

Annual Coupon

The interest payment distributed each year to holders of bonds, generally represented as a percentage of the bond's principal amount.

Maturity

The date on which the principal amount of a note, draft, acceptance bond, or another debt instrument becomes due and is repaid to the investor.

Market Interest Rate

The prevailing rate of interest that is available in the market for savings, loans, and investments.

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