Which of the Following Forms of Financing Tends to Be

question 26

Multiple Choice

Which of the following forms of financing tends to be the least flexible?

• A)Bank debt
• B)Mezzanine debt
• C)Equity contribution
• D)High yield bonds

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Definitions:

Bond Premium

The surplus of a bond's market price over its nominal or face value.

Face Amount

The total amount of money that will be paid at maturity by a financial instrument such as a bond or life insurance policy.

Unamortized Premium

The portion of the premium paid over the par value of a bond that has not yet been expensed in the company's financial statements.

Carrying Amount

The book value of assets and liabilities on a company's balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment costs.