Which One of the Following Statements Is Correct Concerning the Issuance

question 6

Multiple Choice

Which one of the following statements is correct concerning the issuance of long-term debt?

• A) A direct private long-term loan has to be registered with the SEC.
• B) Direct placement debt tends to have more restrictive covenants than publicly issued debt.
• C) Distribution costs are lower for public debt than for private debt.
• D) It is easier to renegotiate public debt than private debt.
• E) Wealthy individuals tend to dominate the private debt market.

---

Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership of the company’s shareholders.

Balance Sheet

An accounting document that outlines an organization's resources, debts, and ownership interests on a certain date.

Transactions

Financial activities involving the exchange of goods, services, or funds between two parties.

Common Stock

A type of security that signifies holding an equity stake in a corporation, indicating ownership in the company.