Of the Sources of External Funds for Nonfinancial Businesses in the United

question 86

Multiple Choice

Of the sources of external funds for nonfinancial businesses in the United States,corporate bonds and commercial paper account for approximately ________ of the total.

• A)5%
• B)10%
• C)32%
• D)50%

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Definitions:

Financial Restructuring

The process of reorganizing a company's financial structure, often involving re-negotiation of debts and equity, to improve its liquidity and ensure its survival.

WACC

The weighted average cost of capital, which is the average rate of return a company is expected to pay its security holders to finance its assets.

Cost of Equity

The return a firm theoretically pays to its equity investors to compensate them for the risk they undertake by investing their capital.