BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
____ and ____ carry a fixed rate of interest and are to be paid off irrespective of the firm’s revenues
A
Debentures, Dividends
B
Debentures, Bonds
C
Dividends, Bonds
D
Dividends, Treasury notes
Explanation: 

Detailed explanation-1: -Debentures and Bonds carry a fixed rate of interest and are to be paid off irrespective of the firm’s revenues.

Detailed explanation-2: -Bonds and Debentures are known as debt instruments because companies use them to raise capital with a promise to repay it after a fixed period of time. The companies also pay a fixed or floating interest rate on this capital on specified periods during the tenure of this debt instrument.

Detailed explanation-3: -Only once your bond has registered, can you apply for a fixed interest rate and then there is a strict time limit attached before the offer lapses."

Detailed explanation-4: -A fixed rate loan has the same interest rate for the entirety of the borrowing period, while variable rate loans have an interest rate that changes over time depending on the market. Borrowers who prefer predictable payments generally prefer fixed rate loans, which won’t change in cost.

Detailed explanation-5: -What is a Fixed Rate Note? A fixed rate note is a debt instrument that pays the same amount on each interest payment date. A fixed rate note can be created with an initial term, or it may have no specified maturity date. The issuer has to pay back the note’s face value at some time.

There is 1 question to complete.