ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!


    Question

    Which of the following can be considered as an example

    of Quasi-Equity financing for a company?
    A Mezzanine debt Correct Answer Incorrect Answer
    B Preference shares with flexible repayment terms Correct Answer Incorrect Answer
    C Subordinated (junior) debt Correct Answer Incorrect Answer
    D All of the above Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Quasi-equity refers to financial instruments that blend the features of both debt and equity. They are often unsecured, have flexible repayment schedules, and involve a higher level of risk compared to traditional debt, making them resemble equity in some aspects. Examples include: тАв Mezzanine debt: Typically unsecured and repaid based on company performance. тАв Preference shares with flexible repayment or dividend terms: Provide an equity-like risk capital without diluting ordinary shareholdersтАЩ control. тАв Subordinated (junior) debt: Ranks below other debts in case of liquidation, often structured with flexible terms. Thus, all of these qualify as quasi-equity instruments.

    Practice Next
    More Financial Management Questions
    ask-question