The CFO of a satellite radio company was trying to work his magic today as he solicited another telecommunications/entertainment company to invest in his company in order to prevent bankruptcy. Having refinanced the company less than a year ago, the satellite radio finance manager had a $75 million note coming due today. The current financing arrangement represents
A) a long-term sale of stock to private investors.
B) short-term debt financing.
C) the issuance of long-term bonds.
D) a leveraged buy-out.

Question

Quizplus · Accepted Answer

Debt financing refer to funds raised through various forms of borrowing that must be repaid. In this case, the money was raised less than a year ago, and it is already due to be repaid. This represents a short-term loan.

The CFO of a Satellite Radio Company Was Trying to Work