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CIMA Financial Strategy F3 Question # 26 Topic 3 Discussion

CIMA Financial Strategy F3 Question # 26 Topic 3 Discussion

F3 Exam Topic 3 Question 26 Discussion:
Question #: 26
Topic #: 3

A company based in Country A with the A$ as its functional currency requires A$500 million 20-year debt finance to finance a long-term investment The company has a high credit rating, but has not previously issued corporate bonds which are listed on the stock exchange Which THREE of the following are advantages of issuing 20 year bonds compared with simply borrowing for a 20 year period?


A.

Larger capital market


B.

Greater availability of debt of 20-year duration


C.

Lower arrangement costs


D.

Less administrative effort to arrange the new finance


E.

Lower interest rate


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