Which of the Following Features Is NOT Generally True of Project

question 89

Multiple Choice

Which of the following features is NOT generally true of project finance in Australia?

• A) Guarantees provided by sponsors to lenders usually do not cover all the risks involved in the project.
• B) A project company is usually established as a separate legal entity.
• C) Lenders rely mainly on the expected future cash flows and the assets of the project.
• D) Finance is usually established on a non-recourse basis.

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Definitions:

Corporation's Assets

The resources owned by a corporation that have economic value and can be used to meet its financial obligations.

Preferred Stockholders

Preferred stockholders are investors who own shares of a company's preferred stock, which often provides fixed dividends and priority over common stockholders in asset liquidation.

Current-Year Dividends

The dividends paid by a company to its shareholders from its earnings of the current fiscal year.

Common Stockholders

Owners of common stock in a corporation, who have voting rights and may receive dividends, but are typically last in line to receive assets in the event of liquidation.