Arguments Against the Use of the Shelf-Registration Are

question 36

Multiple Choice

Arguments against the use of the shelf-registration are:

• A) only technology and manufacturing-based firms can use it.
• B) less current information available to investors might raise the cost of debt.
• C) possible market overhang from future issues depressing price.
• D) Both only technology and manufacturing-based firms can use it; and possible market overhang from future issues depressing price.
• E) Both less current information available to investors might raise the cost of debt; and possible market overhang from future issues depressing pricE.

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Definitions:

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.

Simple Interest

Interest calculated on the principal portion of a loan or deposit, without compounding on the interest previously earned.

Original Principal

The initial amount of money borrowed or invested, before the addition of interest or profits.

Compounded Annually

A method of calculating interest where the interest rate is applied once per year to the principal, including any interest from previous periods.