Which one of the following statements is correct concerning the issuance of long-term debt?
A)A direct long-term loan has to be registered with the SEC.
B)Direct placement debt tends to have more restrictive covenants than publicly issued debt.
C)Distribution costs are lower for public debt than for private debt.
D)It is easier to renegotiate public debt than private debt.
E)Wealthy individuals tend to dominate the private debt market.

Question

Quizplus · Accepted Answer

Direct placement debt often comes with more restrictive covenants compared to publicly issued debt. This is because private placements are negotiated directly with a smaller number of investors, allowing these investors to request specific protections or covenants in the agreement.

Which One of the Following Statements Is Correct Concerning the Issuance