A disadvantage of debt financing is that creditors often impose covenants on the borrower.
Answer the following statement true (T) or false (F)
True
A disadvantage of debt financing is that creditors often impose covenants on the borrower. These covenants can hamper a firm's flexibility and might result in unintended problems. See 9-4: Leverage and Capital Structure: How Much Debt Is Too Much Debt?
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With regard to mortgages, the Consumer Finance Protection Bureau (CFPB) requires mortgage servicers
A. to contact borrowers who are 36 days late in making a payment. B. to wait 180 days after nonpayment before beginning foreclosure. C. to credit payments within 3 days after they are received. D. to extend delinquent borrowers additional time to repay the loan.
A financial instrument that obtains its value from some other financial item is known as a(n)
a. clone. b. mutual fund. c. derivative. d. stock exchange. e. underlying.
If a company has advance ticket sales totaling $2,000,000 for the upcoming football season, the receipt of cash would be journalized as:
A. Debit Cash, credit Ticket sales payable. B. Debit Sales, credit Unearned Revenue. C. Debit Unearned Revenue, credit Sales. D. Debit Cash, credit Unearned Revenue. E. Debit Unearned Revenue, credit Cash.
Which of the following is not a finding of previous empirical research on income tax allocation?
a. Income using income tax allocation had a higher degree of association with security price behavior than income determined without income tax allocation. b. The net-of-tax method using a tax rate significantly higher than existing rates had a higher association with security prices than income tax allocation using existing rates. c. There was a better association of net deferred tax liabilities to firm value under SFAS No. 109 than under its predecessor when tax rates increased under the Revenue Reconciliation Act of 1993. d. Investors do not view deferred tax liabilities as real liabilities.