Equity funding is a good option when:

Question 1Equity funding is a good option when:

 

A. Companies want to avoid interest payments on debt

 

B. The company has too much risk to secure favorable loan terms

 

C. Shares can be sold within a reasonable period of time and price

 

D. All answers are

 

Question 2The Form 10-Q is used to report:

 

A. Stock registrations

 

B. Stock sales by insiders

 

C. Annual financial results

 

D. Quarterly financial results

 

Question 3In deleveraging:

 

A. Agency financing cannot be applied

 

B. Excess cash is used to pay down debt

 

C. Covenant renewal should be carried over

 

D. Refinancing must be restricted for the next 12 months

 

Question 4The Over the Counter Bulletin Board

 

A. Lists the securities of those public companies not listed on a stock exchange, but which are current in their SEC filings

 

B. Lists the securities of those public companies which are not current in their SEC filings

 

C. Is another form of the NASDAQ

 

D. Lists only the amount of short sales in a company’s stock

 

Question 5A credit rating agency:

 

A. Is prohibited from providing credit rating advisory services

 

B. Values issued warrants

 

C. May alter the a rating subsequent to its initial issuance

 

D. Is prohibited from charging fees to the issuers of debt instruments

 

Question 6 Accruing an earnings credit is a reasonable investment strategy when:

 

A. Interest rates are low and there is little cash in the bank

 

B. There is an active treasury staff to manage investments

 

C. The cash balance in an account is high

 

D. Interest rates are high

 

Question 7Cash concentration is particularly useful:

 

A. For a large number of dispersed locations

 

B. For a large manufacturing operation

 

C. For a company providing services under a small number of national contracts

 

D. For a software company selling through a website

 

Question 8A tiered investment strategy:

 

A. Matches investment maturities to when cash will be needed

 

B. Involves making investments of staggered durations

 

C. Works best in situations where there is minimal cash on hand

 

D. Assumes some cash will be in continuous use and some will be in occasional use or has no planned usage

 

Question 9A credit rating:

 

A. Can be assigned to the issuer of certain types of debt (i.e. bonds) or to the issuer

 

B. Is used by investors to determine the price at which to buy debt

 

C. Is provided by Nationally Recognized Statistical Rating Organizations (NRSROs)

 

D. All answers are

 

Question 10A good reason for taking a company public is:

 

A. Owners of the company can more easily sell their shares

 

B. The financial statements must be audited

 

C. There will be increased pressure to increase short-term profits

 

D. The increased cost of directors and officers liability insurance

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