Comment on the following proposition: The use of floating-rate debt eliminates interest rate risk (the risk that interest payment amounts will change in the future) for both the borrower and the lender.
Answer to relevant QuestionsList and briefly discuss the key features that distinguish long-term debt issues from each other. What is a trustee? Why do bondholders insist that a trustee be included in all public bond offerings? Why are these less necessary in private debt placements? Define the following: direct lease, sale-leaseback arrangement, leveraged lease, and financial (capital) lease. What elements must be included in a lease in order for it to be considered a financial (capital) lease? High-Gearing Incorporated is considering offering a new $40 million bond issue to replace an outstanding $40 million bond issue. The firm wishes to take advantage of the decline in interest rates that has occurred since the ...What is a stock dividend? How does this differ from a stock split?
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