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Mezzanine capital: Quiz


Question 1: These sorts of mezzanine loans are often collateralized by the stock of the development company rather than the developed property itself (as would be the case with a traditional ________).
LienReal estateMortgageConveyancing

Question 2: Mezzanine financings can be structured either as ________ (typically an unsecured and subordinated note) or preferred stock.
DebtBond (finance)Credit (finance)Consumer debt

Question 3: In ________, mezzanine capital is used in conjunction with other securities to fund the purchase price of the company being acquired.
Corporate raidLeveraged buyoutPublicly traded private equityPrivate equity

Question 4: Financial sponsors will seek to use mezzanine capital in a ________ in order to reduce the amount of the capital invested by the private equity firm.
Publicly traded private equityCorporate raidCorporate financeLeveraged buyout

Question 5: This allows the lender to engage in a more rapid seizure of underlying collateral in the event of default and ________.
MortgageLienForeclosureCommon law

Question 6: The interest rate can be either fixed throughout the term of the loan or can fluctuate (i.e., float) along with ________ or other base rates.
EurodollarLondon Interbank Offered RateEuro Interbank Offered RateFutures contract

Question 7: Mezzanine capital, in ________, refers to a subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of the common shares.
Bond (finance)FinanceFinancial marketInterest rate

Question 8: In a holding company structure, as there are no operations and hence no cash flows, the structural subordination of the security and the reliance on cash ________ from the operating company introduces additional risk and typically higher cost.
Return on equityDividendFinancial ratioEV/EBITDA

Question 9: Ownership — Along with the typical interest payment associated with debt, mezzanine capital will often include an equity stake in the form of attached warrants or a conversion feature, similar to that of a ________.
Convertible bondBond (finance)Preferred stockExchangeable bond


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