Which One of the Following Statements Concerning Debt Issues Is

question 73

Multiple Choice

Which one of the following statements concerning debt issues is correct?

• A)A prospectus is required for public issues of equity but not for debt.
• B)The only difference between a term loan and a private placement is the size of the issue.
• C)Direct long-term loans must be registered with the SEC.
• D)Firms often pay higher interest rates on term loans than on public issues of debt.
• E)Public debt tends to have more restrictive covenants than private debt.

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Definitions:

Profit-Maximizing

A company's strategy aimed at adjusting their level of output to generate the highest possible profit.

Demand Schedule

A table that lists the quantity of a good that consumers are willing and able to purchase at different prices over a specified period of time.

Total Cost

The complete amount of expenses incurred by a business in the production of goods or services, including both fixed and variable costs.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, enabling firms to make adjustments such that supply meets demand at a profit-maximizing level.