Online F3 Questions Video

The Treasurer should buy an interested rate floor and sell an interested cap ta the same time

The Treasurer will retain the benefit of movements in interest rates below the floor limit.

The cost of a collar is lower than the cost of a cap a one.

The Treasurer will have to negotiate the options with Z's bank.

It does not account for the intangible assets.

It accounts for the intangible assets at historical value.

It accounts for intangible assets at net realisable value.

It does not account for tangible assets.

A company must be listed before it can issue bones.

The largest issuer of bond i3 the government.

Purchasing bonds in the capital markets enables entities to borrow large amounts of finance.

The bond market is unregulated making it easier to raise finance

Bonds issues in the corporate debt market are underwritten.

The issue price has to be at least 20% below the pre-rights share price.

The issue price of new shares should be set to guarantee the full take up of shares offered.

The actual ex-rights price may be higher than the theoretical ex-rights price due to the value created from the project.

Company A's current low gearing ratio may require a rights issue rather than a debt issue to finance the new project.

According to Modigliani and Miller's Theory of Capital Structure with tax, the rights issue will result in a lower cost of equity for Company A.