Questions from Financial Management

Q: What do we mean by capitalizing lease payments?

What do we mean by capitalizing lease payments?

Q: Discuss the difference between a passive and an active dividend policy.

Discuss the difference between a passive and an active dividend policy.

Q: What are some specific features of bond agreements?

What are some specific features of bond agreements?

Q: Explain the close parallel between a finance lease and the borrow-

Explain the close parallel between a finance lease and the borrow-purchase decision from the viewpoint of both the balance sheet and the income statement.

Q: Discuss the relationship between the coupon rate (original interest rate at

Discuss the relationship between the coupon rate (original interest rate at time of issue) on a bond and its security provisions.

Q: Take the following list of securities and arrange them in order of

Take the following list of securities and arrange them in order of their priority of claims: Preferred stock………………………..Senior debenture Subordinated debenture………..Senior secured debt Common stock…………...

Q: What method of “bond repayment” reduces debt and increases the

What method of “bond repayment” reduces debt and increases the amount of common stock outstanding?

Q: What is the purpose of serial repayments and sinking funds?

What is the purpose of serial repayments and sinking funds?

Q: Why has corporate management become increasingly sensitive to the desires of large

Why has corporate management become increasingly sensitive to the desires of large institutional investors?

Q: What is an advantage of floating rate preferred stock for the risk

What is an advantage of floating rate preferred stock for the risk-averse investor?