A company uses a financial instrument for bridge financing. The instrument here is short term, low risk, unsecured and highly liquid. It needed to buy machinery for which it issued equity. This turned out to be expensive as this issue involved floatation costs. The company is large and has good creditworthy and this method has come up as a great help to it. Based on the above case study, answer the following: Which financial instrument is indicated in the above case? Which type of instrument is this? Name the types of floatation costs which are generally involved? How has this method helped the company? Name 2 money market instruments which are issued at discount and redeemed at par.
A company uses a financial instrument for bridge financing. The instrument here is short term, low risk, unsecured and highly liquid. It needed to buy machinery for which it issued equity. This turned out to be expensive as this issue involved floatation costs. The company is large and has good creditworthy and this method has come up as a great help to it. Based on the above case study, answer the following: Which financial instrument is indicated in the above case? Which type of instrument is this? Name the types of floatation costs which are generally involved? How has this method helped the company? Name 2 money market instruments which are issued at discount and redeemed at par.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A company uses a financial instrument for bridge financing. The instrument here is short term, low risk, unsecured and highly liquid. It needed to buy machinery for which it issued equity. This turned out to be expensive as this issue involved floatation costs. The company is large and has good creditworthy and this method has come up as a great help to it.
Based on the above case study, answer the following:
- Which financial instrument is indicated in the above case?
- Which type of instrument is this?
- Name the types of floatation costs which are generally involved?
- How has this method helped the company?
- Name 2
money market instruments which are issued at discount and redeemed at par.
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