A Bank Has Issued $5,000,000 in Long Term Debt and Since

question 113

Multiple Choice

A bank has issued $5,000,000 in long term debt and since that time interest rates have risen so that it will only cost the bank $3,000,000 to buy the long term debt back.The bank decides to issue $3,000,000 in new stock and use the proceeds to retire the long term debt.What way of meeting their capital needs is the bank taking?

• A)Issuing common stock
• B)Issuing preferred stock
• C)Issuing subordinated notes and debentures
• D)Selling assets and leasing facilities
• E)Swapping stock for debt instruments

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Definitions:

Biological Basis

The underlying physiological and genetic factors that contribute to an individual's characteristics, behaviors, or conditions.

Eysenck

Refers to Hans Eysenck, a psychologist noted for his work on personality theory and the biological basis of personality.

Personality

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