The CFO of a Satellite Radio Company Was Trying to Work

question 156

Multiple Choice

The CFO of a satellite radio company was trying to work his magic today as he solicited another telecommunications/entertainment company to invest in his company in order to prevent bankruptcy. Having refinanced the company less than a year ago, the satellite radio finance manager had a $75 million note coming due today. The current financing arrangement represents

• A) a long-term sale of stock to private investors.
• B) short-term debt financing.
• C) the issuance of long-term bonds.
• D) a leveraged buy-out.

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Definitions:

Outstanding Shares

The cumulative quantity of a company's shares that have been distributed and are currently owned by investors.

Dividend Income

Income received from owning shares in a company, usually distributed from the company's profits.

Growth Rate

The measure of an entity’s growth, expressed in percentage terms, typically calculated for revenue or profit over a specific period.

Transaction Costs

Expenses incurred when buying or selling securities, including commissions, taxes, and other fees.