Most of the Change in IBM's Capital Structure During the 2001

question 19

Multiple Choice

Most of the change in IBM's capital structure during the 2001 to 2003 period was the result of

• A)short-term debt issuance.
• B)stock repurchases.
• C)changes in the market value of IBM's equity.
• D)long-term debt issuance.

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Definitions:

Fixed Rate Debt

A type of loan or security with an interest rate that remains constant throughout the life of the loan or security.

Interest Rate Swaps

Financial derivatives contracts where two parties agree to exchange one stream of interest payments for another, based on a specified principal amount.

Net Interest

Net interest refers to the difference between the interest income generated by banks or financial institutions and the amount of interest paid out to their depositors.

Copper Futures

Contracts to buy or sell copper at a predetermined price on a specified future date.