Which of the following would NOT be a reasonable bond covenant? 1) The company can engage...
Which of the following would NOT be a reasonable bond covenant?
1) The company can engage in unlimited capital investment.
2) The company will keep a long-term debt ratio of less than or
equal to 75%.
3) The company commits to not selling any more bonds.
4) The company is required to regularly issue audited financial
statements.
Homework Answers
The company can engage in unlimited capital investment.
This is not a reasonable bond covenant, as bond covenants resist companies to take steps that is unfavorable to bond holders, but here it is not favorable for the bond holders to allow company to do unlimited capital investment.
Add Answer to:
Which of the following would NOT be a reasonable bond
covenant?
1) The company can engage...
1)Which one of these definitions is correct? Premium bond: bond that sells for less than face...
1)Which one of these definitions is correct? Premium bond: bond that sells for less than face value Unfunded debt: long-term corporate debt Dirty price: market price, excluding accrued interest Negative covenant: a "thou shalt" agreement Call provision: issuer's right to repurchase a bond prior to maturity 2) A convertible bond can be exchanged for a newly issued bond if it carries a higher coupon rate. any other outstanding bond. shares of company stock. a new bond if the current bond’s...
QUESTION 25 Occasionally, companies engage in important investing and financing activities which do not affect cash....
QUESTION 25 Occasionally, companies engage in important investing and financing activities which do not affect cash. If the amount of the transaction is significant, how should it be disclosed when financial statements are prepared? 1. In investing activities. 2. In a note to the financial statements or in a supplemental schedule. 3. In both investing and financing activities. 4. In a separate section in the cash flow statement with a corresponding nero balance QUESTION 26 When determining the amount of...
can anyone help me with this assignment?Tia C14-12 Researching GAAP C14-1 Situation You are beginning the...
can anyone help me with this assignment?Tia
C14-12 Researching GAAP C14-1 Situation You are beginning the 2016 audit of Alta Tierra Company's long term debt, and you determine that the company's long term note payable requires that it comply with cer tain financial covenants. The note payable is dated January 1, 2013, has a face value of $1,000,000, is due December 31, 2022, and is held by First Bank of Apex. The note pay able requires that Alta Tierra maintain...
Which of the following best describes a best efforts underwiting commitment? If the entire issue cannot...
Which of the following best describes a best efforts underwiting commitment? If the entire issue cannot be sold at the offering price, the deal is called off and the issuing company receives nothing Underwriter is only responsible for half of the issue Underwriter commits to selling as much of the issue as possible at the agreed-on offering price but can return any unsold shares to the issuer without inancial responsblity The underriter agrees to buy the eire issue and assume...
2, (3 pts) (Cfin, 11-1) Global products plans to issue long term bonds to raise funds...
2, (3 pts) (Cfin, 11-1) Global products plans to issue long term bonds to raise funds to finance its growth. The company has existing bonds outstanding that are similar to the new bonds it expects to issue. The existing bonds have a face value equal to $1000, mature in 10 years, pay $60 interest annually, and are currently selling for $1077 each. Global's marginal tax rate is 40%. (a) What should be the coupon rate on the new bond issue?...
answer please It Further CEG Capital Inc. is a large holding company that uses long-term debt...
answer please
It Further CEG Capital Inc. is a large holding company that uses long-term debt extensively to fund its operations. At December 31, the company reported total assets of $100 million, total debt of $55 million, and total equity of $45 million. In January, the company issued $11 billion in long-tem bonds to investors at par value. This was the largest debt issuance in the company's history, and it significantly increased the company's ratio of total debt to total...
please help on question 2 Shrieves Company has been in the market for many years. Recently...
please help on question 2
Shrieves Company has been in the market for many years. Recently the company has decided to look seriously at a 5-year program and raise additional $15 million capital. Assume that you are the CFO of this company, and you need to decide the capital budgeting and evaluate the new program First, the company need estimate the optimal capital structure to minimize the total cost of raising new capital of the company. For long-term capital investment...
Name Date Principles of Finance Chapters 1 & 2 Week 6 11. Which of the following...
Name Date Principles of Finance Chapters 1 & 2 Week 6 11. Which of the following statements is correct? a. A warrant is basically a long-term option that enables the holder to sell common stock back to the firm at an agreed upon price, at a specified time in the future. b. Generally, warrants are distributed along with preferred stock in order to make the preferred stock less risky. c. If a company issuing coupon paying debt wanted to reduce...
37. Which of the following statements is NOT true? A A company may exclude a short-term...
37. Which of the following statements is NOT true? A A company may exclude a short-term obligation from current liabilities, if, at statement of financial position date, the entity expects to refinance under an existing agreement for at least a year, and the decision is solely at its discretion B Cash dividends should be recorded as a liability when they are declared by the board of directors C Warranty costs are charged to expense as they are paid if company...
Information: • On August 1, Terry issued a $1,600,000, semi-annual, 6 year, 4.5% bond. The market...
Information: • On August 1, Terry issued a $1,600,000, semi-annual, 6 year, 4.5% bond. The market rate for similar bonds on that day was 5.0%. Terry uses the effective interest method to record the amortization or premiums and discounts. Terry’s management has decided to report net bonds on the balance sheet, instead of reporting the bond and its premium or discount separately. No entries have yet been made for the bond. Terry’s management would like to know the effect of...
QUESTION 25 Occasionally, companies engage in important investing and financing activities which do not affect cash. If the amount of the transaction is significant, how should it be disclosed when financial statements are prepared? 1. In investing activities. 2. In a note to the financial statements or in a supplemental schedule. 3. In both investing and financing activities. 4. In a separate section in the cash flow statement with a corresponding nero balance QUESTION 26 When determining the amount of...
can anyone help me with this assignment?Tia
C14-12 Researching GAAP C14-1 Situation You are beginning the 2016 audit of Alta Tierra Company's long term debt, and you determine that the company's long term note payable requires that it comply with cer tain financial covenants. The note payable is dated January 1, 2013, has a face value of $1,000,000, is due December 31, 2022, and is held by First Bank of Apex. The note pay able requires that Alta Tierra maintain...
Which of the following best describes a best efforts underwiting commitment? If the entire issue cannot be sold at the offering price, the deal is called off and the issuing company receives nothing Underwriter is only responsible for half of the issue Underwriter commits to selling as much of the issue as possible at the agreed-on offering price but can return any unsold shares to the issuer without inancial responsblity The underriter agrees to buy the eire issue and assume...
2, (3 pts) (Cfin, 11-1) Global products plans to issue long term bonds to raise funds to finance its growth. The company has existing bonds outstanding that are similar to the new bonds it expects to issue. The existing bonds have a face value equal to $1000, mature in 10 years, pay $60 interest annually, and are currently selling for $1077 each. Global's marginal tax rate is 40%. (a) What should be the coupon rate on the new bond issue?...
answer please
It Further CEG Capital Inc. is a large holding company that uses long-term debt extensively to fund its operations. At December 31, the company reported total assets of $100 million, total debt of $55 million, and total equity of $45 million. In January, the company issued $11 billion in long-tem bonds to investors at par value. This was the largest debt issuance in the company's history, and it significantly increased the company's ratio of total debt to total...
please help on question 2
Shrieves Company has been in the market for many years. Recently the company has decided to look seriously at a 5-year program and raise additional $15 million capital. Assume that you are the CFO of this company, and you need to decide the capital budgeting and evaluate the new program First, the company need estimate the optimal capital structure to minimize the total cost of raising new capital of the company. For long-term capital investment...
Name Date Principles of Finance Chapters 1 & 2 Week 6 11. Which of the following statements is correct? a. A warrant is basically a long-term option that enables the holder to sell common stock back to the firm at an agreed upon price, at a specified time in the future. b. Generally, warrants are distributed along with preferred stock in order to make the preferred stock less risky. c. If a company issuing coupon paying debt wanted to reduce...
Most questions answered within 3 hours.
-
The manager at a car assembly plant believes that the mean
assembly time for a car...
asked 12 minutes ago -
Which of the following is true of electron capture?
A) It decreases the nuclide's mass number...
asked 1 hour ago -
Assuming an efficiency of 43.10%, calculate the actual yield of
magnesium nitrate formed from 114.9 g...
asked 2 hours ago -
The highly pathogenic bacterium Clostridium
perfringens causes gangrene, a disease that results in the
destruction of...
asked 4 hours ago -
In the context of situation analysis, which of the following is
a category for analysis in...
asked 4 hours ago -
In a study of the gas phase decomposition of sulfuryl chloride
at 600 K SO2Cl2(g)SO2(g) +...
asked 4 hours ago -
75 g of 2-propanol (C3H8O) and 25 g of pentane are mixed in a
200 mL...
asked 4 hours ago -
The 2800-turn coil in a dc motor has an area per turn of 1.1 ×
10-2...
asked 4 hours ago -
Draw a combinational logic circuit diagram with a symbol inside
the box for two I/P of...
asked 4 hours ago -
The cliché we use quite a lot in finance is: there is a need to
maximize...
asked 4 hours ago -
In class we discussed the addition of HCl to alpha pinene. Would
you expect one or...
asked 4 hours ago -
I'm trying to explain to my daughter to help her please help
me
I tagged the...
asked 4 hours ago