Chapter 12: Long Term External Finance

Question 1 of 3

Q1 . An initial public offer (IPO) is the first issue of capital made to the public

A True

B False

Q2 . Eurobonds are debt securities that are issued

A Outside the domestic capital markets of the issuer in a currency that is the domestic currency of the place of issue

B Outside the domestic capital markets of the issuer in a currency that is neither the domestic currency of the issuer nor the domestic currency of the place of issue

C Outside the domestic capital markets of the issuer in a currency that is the domestic currency of the issuer

D Inside the domestic capital markets of the issuer in a currency that is neither the domestic currency of the issuer nor the domestic currency of the place of issue

Q3 . Which of the following statements is false

A Corporate bonds always pay semi annual coupons

B The face value on corporate bonds is repaid when the bonds mature

C Corporate bonds are debt instruments

D The issuer of corporate bonds receives the face value of the bonds at issue

Q4 . In order for firms issuing convertible notes to claim tax deductions on interest payments, which of the following conditions must be met

A The interest rate is fixed

B Total funds raised from the issue of convertible notes must not exceed $500 million

C Conversion must take place two and ten years from the date of issue without exception

D Issuers decide when to convert notes to ordinary shares

Q5 . Preference shares are best described as hybrid debt instruments

A True

B False

Q6 . Hybrid securities are equity securities which act like debt

A True

B False

Q7 . Which of the following is not a potential benefit of leasing

A Taxation benefits

B Increased turnover

C Speed in acquisition of assets

D Avoidance of obsolescence

Q8 . A person who applies for and buys shares issued under a prospectus and sells them on the first day of trade on the market for a profit is a

A Bear

B Bull

C Stag

D Dead cat

Q9 . An option is an obligation to undertake a trade by a given date at a given price

A True

B False

Q10 . Which of the following statements is true

A Subordinated debt ranks above ordinary shareholders in the event of liquidation

B Subordinated debt ranks above other similar classes of debt in the event that a firm is liquidated

C All of the above

D Unsubordinated debt takes a lower ranking than other debt of similar characteristics

From Classroom to Quiz Stardom

When James Wilson first created a quiz on ancient civilizations for his high school history class, he never imagined it would lead to a side career as one of QuizMaker's most successful creators.

Three years and over 200 quizzes later, James's 'History Mysteries' series has amassed more than 2 million plays and a dedicated following of history enthusiasts from around the world.

Finding a Niche in Historical Puzzles

James's approach combines historical accuracy with engaging storytelling and problem-solving elements. 'I wanted to create quizzes that weren't just about memorizing dates and names,' he explains. 'Each quiz tells a story and invites players to solve a historical mystery or puzzle.'

This unique format has resonated with players who might not typically be drawn to history content, helping James build an audience beyond traditional history buffs.

Building a Community Around Historical Content

Beyond creating engaging quizzes, James has built a thriving community through his dedicated social media channels and a monthly newsletter where he shares historical facts, behind-the-scenes research, and previews of upcoming quizzes.

'The community aspect has been the most rewarding part,' James says. 'I receive messages from students saying my quizzes helped them develop a love for history, and from older adults who enjoy testing their knowledge and learning new things.'

Monetization Strategy

While James started creating quizzes as a teaching tool, they've now become a significant source of income. Through a combination of premium quizzes, sponsorships from educational companies, and affiliate marketing for history books and courses, he's been able to generate substantial revenue.

'Last year, my quiz income actually exceeded my teaching salary,' James reveals. 'It's allowed me to reduce my teaching hours and focus more on creating high-quality educational content.'