Financing Created by an Intermediary That Involves Separate Instruments with Lenders

question 38

Multiple Choice

Financing created by an intermediary that involves separate instruments with lenders and borrowers is called:

• A)direct financing
• B)indirect financing
• C)secondary financing
• D)none of the above

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Definitions:

Tax-Exempt

Financial earnings that are not subject to taxation by the government, often applied to certain bonds and municipal securities.

Preferred Stock

Nonvoting shares in a corporation, paying a fixed or variable stream of dividends.

Cumulative Dividends

Dividends that are owed to preferred shareholders of a company and must be paid out before dividends can be distributed to common shareholders.

Voting Power

Voting power refers to the number of votes a shareholder has in a company's decisions, typically based on the number of shares held.