Answer Blank Options

1 Blank) The equipment itself OR Assets other than the equipment bought

2 Blank) Short term OR Long Term

3 Blank) Get a term loan or a private placement OR Issue a public offering fo long-term bonds

Attempts Average/1 12. Managing maturity structure of debt Along with decisions about optimal debt structure, firms need to decide on the kind of maturities the debt in their capital structure should have. There are several factors that affect the choice of maturity structure. Based on your understanding of the factors associated with the choice of maturity structure, complete the following sentences: Suppose a company bought equipment with a 10-year life. If it took a 30-year debt to finance the equipment, then it would have to pay off its debt with the cash flows generated from assets other than the equipment bought If a firm expects earnings to decline in the future, it will likely use long-term debt. If the amount of financing required is relatively small, the company is likely to get a term loan or a private placement