Indicate Whether Each of the Following Statements Is True or False

question 23

Short Answer

Indicate whether each of the following statements is true or false.
1. Some long-term loans have variable interest rates
2. Cash for acquiring machinery or buildings is often obtained by issuing long-term debt
3. Short-term notes payable normally mature within a year
4. Installment notes payable usually have terms of 2-5 years
5. Most businesses finance part of their activities with long-term debt

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Definitions:

Conversion Price

The predetermined price at which convertible securities, like bonds or preferred stocks, can be exchanged for a specified amount of another form, typically common stock.

Expected Return

Expected return is the anticipated amount of profit or loss an investment is projected to generate, based on historical or forecasted performance.

Warrants

Warrants are a type of security that gives the holder the right to purchase a company’s stock at a specific price until the expiration date.

Long-term Call Options

Financial derivatives granting the holder the right, but not the obligation, to buy a security at a fixed price within a specific long-term period.