Financial Management

TTH 2:30-4:00 pm

1. Define non-current liabilities. Give common examples of non-current

liabilities.

2. What are bonds? Differentiate contract rate and effective rate of interest.

3. Why might a corporation chose to issue debt securities rather than equity
securities to meet its additional long-term fund requirements?

4. Differentiate a serial bond from a term bond.

5. How does a registered bond differ from a coupon or bearer bonds?

6. What is a callable bond?

7. What are debenture bonds? Secure bonds?

8. When is a bond issued a face value? At less than face value? At more than
face value?

9. What is a bond price or market price? How is a bond price calculated given
the prevailing market rate of interest of similar obligations?

10.What are bond issue costs? How are they treated and presented in the
financial statements?

11.Describe the methods of allocating the premium or discount. Which method

is generally acceptable?

12.How would amortization of premium affect the nominal interest and the
carrying value of the bond?

13.How would amortization of discount affect the nominal interest and the
carrying value of the bond?

14.What are detachable stock warrants? Why do corporations issue bonds with
detachable stock warrants?

15.What are convertible bonds? Why do corporations issue convertible bonds?

16.Are conversion privileges or rights included in the issue of convertible bonds

separable from the debt itself?

17.What is troubled debt restructuring?

18.What are the different ways of restructuring a troubled debt?