27) Why would a company issue debt rather than sell stock?

a) Finance deficits

b) Benefit from operating leverage

c) Undertake growth

d) All of the above

28) Which of the following is NOT true concerning the difference between bonds and

debentures?

a) Bonds are secured by assets

b) Debentures are secured by assets

c) Government of Canada bonds are not secured by assets

d) Debentures are based on creditworthiness

29) With a certain bond, the bondholder may select a second later maturity date. To what

what kind of debt does this refer?

a) Extendible debenture

b) Retractable bond

c) Instalment debenture

d) Variable rate bond

30) A Canadian company issued a bond in Germany which paid interest and the face

value at maturity in Deutsche marks (German currency). This is an example of a(n):

a) Domestic bond

b) Eurobond

c) Foreign bond

d) Euro-Canadian bond

31) Once a straight bond (regular bond) is issued, which component of the bond can

change?

a) The face value

b) The coupon rate

c) The term to maturity

a The maturity date

32) The holder of a Strip Bond receives no interest payments, instead, the strip is

purchased at a discount and mature at par.

a) True

b) False