The Promised Yield on Bankers' Acceptances Is Typically ______ Than

question 3

Multiple Choice

The promised yield on bankers' acceptances is typically ______ than the promised yield on the commercial paper of similar firms because ______.

• A)higher; banks charge a fee to accept or guarantee the debt
• B)lower; banks charge a fee to accept or guarantee the debt
• C)higher; the banks that guarantee the debt are more creditworthy than the issuing firm
• D)lower; the banks that guarantee the debt are more creditworthy than the issuing firm

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Definitions:

Cash Dividends

Cash distributions made to shareholders by a company out of its earnings.

Stockholders' Equity

Stockholders' Equity refers to the residual interest in the assets of a corporation after deducting liabilities, represented by capital stock, retained earnings, and possibly other components.

Increase Expenses

Refers to the rise in costs or expenditures that a company may experience as part of its operations.

Earning Revenue

The income a company generates from its business activities, typically from the sale of goods or services.