Commission for raising funds via the bond and equity markets is an example of floatation costs. True or False

Q: Investors pay load charges to receive: a. higher returns on their investments. b. additional…

A: Individual investors are retail investors who save their surplus funds and invests them in the…

Q: The liability / equity side of an open-ended hedge fund is composed of  __________________.…

A: There are two types of funds. Open ended fund and close ended funds. The funds which allow the…

Q: Investors have no control over ________________ distributions when investing in mutual funds. a)…

A: Mutual fund means pooling of money from various investors to invest in different securities that…

Q: According to the trade-off theory, the decision on capital structure entails a trade-off between the…

A: Capital structure means the way of getting finance from different sources.

Q: Explain concepts such as time value of money, present value and discount rate, and explain how they…

A: Time value of money is a concept which says the value of money today is worth more than the value…

Q: Compare and contrast financing with debt vs. equity.  What is being financed?

A: Financing refers to raising the funds from different sources in order to carry out the business…

Q: Which of the following is not a main core function of the financial system? a. Provide a payments…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: The company wishes to mobilize short term funds through various sources, Which of the following is…

A: Companies wish to mobilize short-term funds for short term financing requirements from the money…

Q: Which of the following has the highest cost of capital? Choose the correct. A. Loans B.…

A: Cost of capital:   It refers to the cost incurred by a company to acquire a given form of fund.

Q: Which of the following is not true with Money Market? Select one: a. Deals in short term funds b.…

A: Money market is a market wherein short term instruments are traded and only those investors who are…

Q: What is a bond sinking fund? What is the purpose of establishing a sinking fund? Are bonds that…

A: A bond sinking fund is the total amount of cash kept in a fund that will be used to retire a bond…

Q: Explain the statement “The money market is necessary but not sufficient for the liquidity of…

A: Money market is an organized market which meets short term requirements of the borrowers and…

Q: A money market mutual fund or exchange-traded fund pools money from investors and purchases various…

A: Mutual funds: They are the institutions which collects money from different investors and then…

Q: Financial markets that facilitate the flow of short-term funds are known as: O Primary markets O…

A: Financial markets can be defined as the market where financial assets or instruments are traded.…

Q: Advantages of investing in mutual funds compared to individual securities include all of the…

A: Mutual funds are type of investment, which are pooled from the group of investors, which are…

Q: ere are two concepts in respect of working capital Select one: a. None of the options b. Cost of…

A: Working capital represents the variance between all the current assets and current liabilities of a…

Q: Fees paid to investment bankers and lawyers for issuing securities are called Component costs…

A: The costs incurred in underwriting and issuing securities is known as issuance cost. It can be…

Q: The _________ of an open-end fund provides the only market for buying or selling the shares of the…

A: Secondary market is the market where the trading of securities take place for the securities that is…

Q: The cost of equity is easier to estimate than the cost of either debt or preferred stock.  True…

A: WACC- Weighted average cost of capital (WACC) is the rate that a company is expected to pay on…

Q: Discuss how market interest rates are affected by borrowers’ need for capital,expected inflation,…

A: The market interest rates are subject to several customer-related variables, including capital…

Q: A sinking fund can be set up in one of two ways. Discuss the advantagesand disadvantages of each…

A: Introduction: A sinking fund is a bond issuing provision that allows for the annual redemption of…

Q: The most difficult component cost of financing to measure is the cost of ________   a Preferred…

A: The component cost of financing for debt is interest.

Q: It is more provident that equity financing is more favored because of the ultimate risks associated…

A: Equity financing entails raising of funds through sale of equity shares while debt financing entails…

Q: Which of the following statements is/are FALSE regarding the differences between the New issue…

A: Primary market is the part of capital market which deals in newly issued securities. It facilitates…

Q: Are securities that provide for a sinking fund regarded as beingriskier than those without this type…

A: Introduction: A sinking fund is nothing but a set up by an economic institution by setting aside…

Q: ._______ Funding that comes from the sale of stock

A: Issue of stock or shares is one of the important source of finance being used by the business.…

Q: Explain the roll of debt and equity markets in the economy. How do they interact with both Primary…

A: Debt and equity market play a vital role in the economy. The market where investors and traders meet…

Q: Why would a corporation elect to raise funds via a securitization rather than a corporate bond?

A: An indirect claim security whose value (in whole or in part) is derived from the market price of the…

Q: difference between Mutual Fund and Venture Capita

A: Venture capital and mutual funds are the sources through which investors make investments in the…

Q: Why do firms generally prefer to borrow funds to obtain long-term financing rather than issue shares…

A: When a firm or company needs capital to grow or start a new project then it uses debt or equity or…

Q: Which of the following is not true with Money Market? Select one: O a. Deals in short term funds b.…

A: The money market is a type of financial market that deals with near-term instruments.

Q: Choose the correct statement about different types of financial markets: a. Capital market is the…

A: From the following statement, we have to find out the correct statement about the financial market.…

Q: Investors generally place their funds in equity securities because of:   a.The expected dividends b…

A: Equity investment is the possibility to increase the value of the principal amount invested. This…

Q: Individuals are more likely to use a bond fund strategy wher O there is low interest rate. the cost…

A: Simply speaking, bond fund strategy is where there is transferring of money in and out of bond fund…

Q: The interest rate at which the MARR is established depends principally upon the cost of capital and…

A: Cost of capital is the cost will be incurred on capital employed. cost of capital is the weight…

Q: Does the concept of revenue less expense equaling an increase in equity or fund balance make sense…

A: The answer for the question on the concept of revenue less expense is discussed hereunder : Every…

Q: Secondary Market can be best described in which of the following statement? a. It is a market for an…

A: Stock market there are buying and selling of securities are done depending on demand and supply of…

Q: In what respect is preferred stock similar to bonds, and in what respect is it similar to common…

A: Preferred stock and bonds are similar in following aspects- - Both preferred stock and bonds have a…

Q: Which of the following sources of financing has the lowest explicit cost?   a common stock   b…

A: Explicit cost are out of pocket cost.

Q: Balanced funds, life-cycle funds, and asset allocation funds all invest in both the stock and bond…

A: Balanced funds are the funds that hold both stocks along with the bond. Asset allocation fund and…

Q: The payments made to a fund's shareholders that result from the sale of securities in the fund's…

A: Distribution can be of two types to the fund shareholders, first is to payment of cash to the…

Characteristics of Bonds