As compared to publicly placed issues, the privately placed bonds are issued for _________?
Correct answer: B. higher paid interest rates
- A. lower paid interest rates
- B. higher paid interest rates
- C. registered interest rates
- D. unregistered interest rates
Explanation
Privately placed bonds are less liquid and are sold to a limited group of investors, so issuers commonly have to offer higher interest rates. Public issues usually attract more investors and therefore may borrow more cheaply.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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