Which One of the Following Statements Concerning the Issuance of Long-Term

question 45

Multiple Choice

Which one of the following statements concerning the issuance of long-term debt is correct?

• A)Rarely is debt issued privately in the U.S.
• B)Private placements generally have shorter maturities than term loans.
• C)All U.S.debt issues,private and public,must be registered with the SEC.
• D)It is easier to renegotiate a public issue than it is a private issue of debt.
• E)A direct placement of debt generally has more restrictive covenants than a public issue.

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Definitions:

Corporate Tax Rate

The corporate tax rate is the percentage of a corporation's income that is seized by the government as tax.

Net Income

The total earnings of a company after all expenses and taxes have been subtracted from total revenue.

Notes Payable

A written promise to pay a certain amount of money, usually including interest, by a specified date or on demand.

Net Purchases

The total amount of purchases after subtracting returns, allowances, and discounts.