1. Which type of offering will generally incur the lowest direct issue costs as a percentage of gross proceeds?
small-sized IPO
large-sized IPO
convertible bonds
SEO
straight bonds
2. The appropriate discount rate that a lessee should use to value a financial lease is the:
lessee’s aftertax weighted average cost of capital.
lessee’s aftertax cost of secured borrowing.
capitalization rate stated in the lease contract. E. current U.S. Treasury T-bill rate.
lessor’s aftertax cost of borrowing.