ce future acquisitions. 3. A company becomes public when it starts an IPO. 4. Payment of dividends from the Amazon firm. 5. Repurchase of shares by the issuer of these. 6. A company exchanges previously issued bonds for preferred shares of the same company. 7. A private investor acquires shares of another counterpart investor. 8. A company buys from another company using
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The following transactions are presented in the markets.
1. A car distributor issues commercial paper to finance the purchase of a fleet of vehicles for inventory.
2. A company issues shares to finance future acquisitions.
3. A company becomes public when it starts an IPO.
4. Payment of dividends from the Amazon firm.
5. Repurchase of shares by the issuer of these.
6. A company exchanges previously issued bonds for
7. A private investor acquires shares of another counterpart investor.
8. A company buys from another company using its own resources (cash).
9. The government of a country issues bonds to finance public capital works.
10. A Chinese investor buys dollars and pays with yuan.
Identify what type of market each transaction belongs to. Primary or secundary
Step by step
Solved in 2 steps
- Determine if the following, if stocks or bonds 1. Its buyers receive return called dividend. a. Stocks b. Bonds 2. It is paid based on its redemption value. a. Stocks b. Bonds 3. It is said to be redeemed at par if face value equals redemption value a. Stocks b. Bonds 4. It is represented by a certificate which is proof of ownership. a. Stocks b. Bonds 5. It grants credit to a company. a. Stocks b. Bonds 6. It represents a claim on the company's assets and earnings. a. Stocks b. Bonds 7. Its buyers become lenders to the company. a. Stocks b. Bonds 8. It is a written contract between the borrower and the lender. a. Stocks b. Bonds 9. Some owners of it earn voting rights to some important company decisions. a. Stocks b. Bonds 10. Some owners of it earn voting rights to some important company decisions. a. Stocks b. Bonds1. Given the choices from time deposits, corporate bonds and stock, where will you invest your company's excess funds? Why? 2. Provide the two major types of Financial Instruments and explain each type briefly.Which of the following can be described as involving indirect finance? a. People pay premiums to an insurance company b. A corporation issues new shares to people c. People lend money to their friends d. People buy bonds from companies
- Describe the accounting for bonds payable, including bonds issued at face amount, bonds issued at a discount, and bonds issued at a premium? Describe how bonds are reported on the balance sheet? Describe how the times interest earned ratio is used to evaluate a company’s financial condition? Describe the advantages and disadvantages of the corporate form of business ownership? Describe the characteristics of corporate stock, the classes of stock, and the accounting entries for stock issuance? Search entries or author .An initial public offering (IPO) occurs: When a public company issues new shares of stock. When an investor buys a particular stock for the first time. The first time a company borrows money in the form of a note payable. The first time a firm issues shares of stock in the public market. e. The first time a firm borrows money in the form of a corporate bondWhich of the following can be described as involving direct finance? O A. People buy shares in a mutual fund. B. People buy shares of common stock in the primary markets. OC. A corporation buys a short-term corporate security in a secondary market. O D. A corporation takes out loans from a bank.
- True or False 1. In equity financing, the corporation is required to distribute dividends to its stockholders on a regular basis. 2. One of the company's sources of funds is its own accumulated earnings. 3. In a debt equity, there exists a debtor and creditor relationship. 4. Supplier's credit as a source of fund is advantageous both to the debtor and the creditor. 5. One can open a deposit account with a lending institution.When a firm issues stock, it has: O A. borrowed from the public. OB. purchased foreign currency. OC. agreed to make periodic payments for a specific period of time to the owner of the security. OD. taken on additional partners that own part of the assets of the firm and share in the firm's earnings.True or False. 1. The fixed assets are recorded in the corporation books at their gross book values. 2. 3. 4. 5. 6. 7. 8. 9. 10. The accounts receivable is recorded at net amount together with the allowance for doubtful accounts. The amount per share which a corporation agrees to pay, if it elects to redeem the stock, is called redemption price. If a corporation issues only one class of stock, this is the Preferred Stock. A corporation issuing preferred stock may at times reserve the right to redeem it later under specified conditions. Such stock is known as callable or redeemable preferred stock. There is always the possibility that a subscriber will pay part of the subscription price, and fails to pay the balance on the call date specified. In this case, the stockholder is considered to have defaulted, and the unpaid amount is called delinquent subscription. A subscriber is considered a stockholder and he possess all the rights of a stockholder. A corporation may reacquire some of…
- Question # 2: Which of the following statements is CORRECT? a. If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction. b. If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction. c. The IPO market is an example of a primary market. d. Question # 3: Which of the following statements is CORRECT? a. Capital market instruments include both long-term debt and common stocks. b. An example of a primary market transaction would be your uncle transferring 100 shares of Wal-Mart stock to you as a birthday gift. c. The NYSE does not exist as a physical location; rather, it represents a loose collection of dealers who trade stocks electronically. d. If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction.…q3 The Issue of shares by the company to the shareholders for the first time is called as what? a. Public issue b. Offer for sale c. Private Placement d. Rights Issues q4 Which of the following Institutions are compensated via commission after the transaction has been successfully completed for buying or selling securities? a. Investment Company b. Brokerages c. Insurance Companies d. Savings and Loans AssociationWhich of the following statements is NOT true of PIPE transactions? In a PIPE transaction, investors purchase securities (equity or debt) directly from a publicly traded company in a private placement. PIPE transaction gives issuers faster access to capital. The securities are virtually always sold to the investors at a discount to the price at which they would sell in the public markets. PIPE transactions are registered with the SEC.