Which One of the Following Best Fits the Description of a Private

question 30

Multiple Choice

Which one of the following best fits the description of a private placement?

• A)5-year commercial bank loan
• B)10-year loan from an insurance company
• C)2-year direct business loan
• D)3-year loan to a firm by its original founder
• E)20-year bonds sold in the public markets

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Definitions:

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a claim on profits in the form of dividends.

Treasury Stock

A corporation’s own stock that has been issued and subsequently reacquired from shareholders by the corporation but not retired.

Investing Activity

Transactions involving the purchase or sale of long-term assets and investments, reflected in the cash flow statement of a company.

Operating Activities

Activities that relate to the primary operations of a company, such as selling goods and services, which generate revenue and expenses.