1. Which factor involves the ability of a bank to locate and hold collateral?
Liquidity
Controllability
Marketability
Cost to liquidate
2. PVS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 4.0% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Question 5 options:
a) $5,412,032
b) $5,547,332
c) $7,706,000
d) $7,898,650
3. Which option typically is the secondary source of repayment for a term loan?
Conversion of current assets
Liquidation of current assets as collateral
Liquidation of fixed assets as collateral
Liquidation of other collateral pledged to the loan