Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock , senior, warrant. a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be ___. b. Interest on many bank loans is based on a of interest. c. A(n) _ bond can be exchanged for shares of the issuing corporation. d. A(n) _ gives its owner the right to buy shares in the issuing company at a predetermined price. e. Dividends on _ cannot be paid unless the firm has also paid any dividends on its ___.

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 14, Problem 1PS

Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant.

a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be _____.
b. Interest on many bank loans is based on a ____ of interest.
c. A(n) _____ bond can be exchanged for shares of the issuing corporation.
d. A(n) _____ gives its owner the right to buy shares in the issuing company at a predetermined price.
e. Dividends on _____ cannot be paid unless the firm has also paid any dividends on its _____.

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

____ occurs when a firm calls a relatively high interest rate issue and replaces it with a lower interest rate issue. a. Bond refunding b. A call feature c. A sinking fund d. Indenture refinancing

Select the item that best fits each description A through H. Description A. Records and tracks the bondholders' names. B. Is unsecured; backed only by the issuer's credit standing. C. Has varying maturity dates for amounts owed. D. The legal contract between the issuer and the bondholders. E. Can be exchanged for shares of the issuer's stock. F. Is unregistered; interest is paid to whoever possesses them. G. Maintains a separate asset account from which bondholders are paid at maturity. H. Pledges specific assets of the issuer as collateral. Items Bearer bond Bond indenture Convertible bond Debenture Registered bond Secured bond

Which statement is FALSE regarding bonds?Select one:The pay back their face value within their maturity.They can be traded on secondary markets. Entitles its holder for cash inflows.When issued they increase the equity of the firm.

Answer 2

Textbook Question

Chapter 14, Problem 1PS

Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant.

a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be _____.
b. Interest on many bank loans is based on a ____ of interest.
c. A(n) _____ bond can be exchanged for shares of the issuing corporation.
d. A(n) _____ gives its owner the right to buy shares in the issuing company at a predetermined price.
e. Dividends on _____ cannot be paid unless the firm has also paid any dividends on its _____.

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 14, Problem 1PS

Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant.

a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be _____.
b. Interest on many bank loans is based on a ____ of interest.
c. A(n) _____ bond can be exchanged for shares of the issuing corporation.
d. A(n) _____ gives its owner the right to buy shares in the issuing company at a predetermined price.
e. Dividends on _____ cannot be paid unless the firm has also paid any dividends on its _____.

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 14, Problem 1PS

Terminology* Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant.

a. If a lender ranks behind the firm’s general creditors in the event of default, his or her loan is said to be _____.
b. Interest on many bank loans is based on a ____ of interest.
c. A(n) _____ bond can be exchanged for shares of the issuing corporation.
d. A(n) _____ gives its owner the right to buy shares in the issuing company at a predetermined price.
e. Dividends on _____ cannot be paid unless the firm has also paid any dividends on its _____.

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Answer 8

Expert Solution & Answer

Summary Introduction

To fill in: The appropriate terminology.

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To fill in: The appropriate terminology.

Answer 12

Explanation of Solution

a.

In a case if the ranking of the lender is behind the general creditors in an default event then his or her loan is termed as subordinated.

b.

The bank loan interest is mainly based on the floating rate of interest.

c.

The bonds that can be exchanged for shares that are issued by a corporation is known as convertible bonds.

d.

A warrant provide their owner their rights to purchase the shares from the company that issues at a price that is predetermined.

e.

The common stock dividends cannot be paid unless the firm makes payment on the dividends of preferred stocks.

Answer 13

Ch. 14 - Terminology Fill in the blanks, using the...Ch. 14 - Prob. 2PS Ch. 14 - Sources of funds True or false? a. Net stock...Ch. 14 - Prob. 4PS Ch. 14 - Company ownership What do we mean when we say that...Ch. 14 - Prob. 6PS Ch. 14 - Prob. 7PS Ch. 14 - Prob. 8PS Ch. 14 - Corporate debt Which of the following features...Ch. 14 - Financial markets and intermediaries. True or...

Solution Summary: The author enumerates the terms used to describe subordinated loans, convertible bonds, warrants, and preferred stock dividends.

Concept explainers

Videos

Explanation of Solution

Want to see more full solutions like this?

Chapter 14 Solutions