EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 3QTD
Summary Introduction
To discuss: The reason why company long period debt high risky than a government long period debt.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Discuss MM proposition II under the situation when there are corporate taxes and risk-free debt.
1. Why do short-term debt securities issued by private companies generally offer higher yields than treasury bills issued by central governments?
Why do corporations pay higher interest rates on debt than the US federal government?
Chapter 12 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 12 - Prob. 1QTDCh. 12 - Prob. 2QTDCh. 12 - Prob. 3QTDCh. 12 - Prob. 4QTDCh. 12 - Prob. 5QTDCh. 12 - Prob. 6QTDCh. 12 - Prob. 7QTDCh. 12 - Prob. 8QTDCh. 12 - Prob. 9QTDCh. 12 - Prob. 10QTD
Ch. 12 - Prob. 11QTDCh. 12 - Prob. 12QTDCh. 12 - Prob. 13QTDCh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4PCh. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - Prob. 7PCh. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Prob. 10PCh. 12 - Prob. 11PCh. 12 - Prob. 12PCh. 12 - Prob. 13PCh. 12 - Prob. 14PCh. 12 - Prob. 15PCh. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Prob. 21PCh. 12 - Prob. 22PCh. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 26P
Knowledge Booster
Similar questions
- Explain the interest rate sensitivity of government debt as a function of: i) its maturity and ii) the level of coupon it pays.arrow_forwardWhat will happen to the price of bonds, quantity of bonds and interest rate if bonds become riskier than stocks and the government starts spending more than their tax revenue? Show this on a graph.arrow_forwardWhich of the following is the risk due to a firm's debt usage? Business risk Financial risk Market risk Interest rate risk Purchasing power risk Exchange rate riskarrow_forward
- Explain how the bond market facilitate government (fiscal) policies. How do you think the bond market could discipline a government & discourage the government from borrowing (& spending) excessively?arrow_forwardWhat are the advantages and disadvantages ofusing short-term debt as a source of financing?arrow_forwardDebt crisis and solutions?arrow_forward
- Why do most municipal bonds pay lower interest than riskless Treasury bonds?arrow_forwardWhy do managers of financial institutions care so muchabout the activities of the Federal Reserve System?arrow_forwardDo you think issuing bonds by the government is effective and does it achieve its purpose?arrow_forward
- Why are U.S. Treasury bonds not completely riskless?arrow_forwardDiscuss how a form of debt can be classified as both Current and Long-Term Liabilities. Why do investors care?arrow_forwardHow can a federal budget deficit increase market equilibrium interest rates and reduce private investment and future economic growth?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning