Finra Exam Series-7 Topic 1 Question 83 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 83
Topic #: 1

[All Series-7 Questions]

When a corporation issues a nonconvertible debenture, what is the effect upon its net worth?

Ait increases

Bif decreases

Cif is unchanged

Dnone of the above

Show Suggested Answer

Suggested Answer: C

it is unchanged. The debentures add to liabilities and to cash (an asset) received from the sale. There is no effect on net worth.

by Alisha at Mar 15, 2024, 05:56 AM

Limited Time Offer

25%

Off

Get Premium Series-7 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Matilda

12 months ago

Candidate 2: I think the debenture represents a liability for the corporation, causing a decrease in net worth.

upvoted 0 times

...

Fernanda

1 years ago

Candidate 1: Can someone provide a rationale for their answer?

upvoted 0 times

...

Maybelle

1 years ago

Candidate 4: I'm not sure about this, but I think none of the above options are correct.

upvoted 0 times

...

Laurel

1 years ago

Candidate 3: I think the net worth remains unchanged when a corporation issues a nonconvertible debenture.

upvoted 0 times

...

Dominque

1 years ago

Candidate 2: I disagree, I believe it decreases the net worth of the corporation.

upvoted 0 times

...

Raymon

1 years ago

Candidate 1: I think when a corporation issues a nonconvertible debenture, it increases its net worth.

upvoted 0 times

...

Markus

1 years ago

I think the correct answer is C) it is unchanged because a nonconvertible debenture doesn't impact net worth directly.

upvoted 0 times

...

Darrel

1 years ago

I see both perspectives. It really depends on the specific circumstances of the corporation.

upvoted 0 times

...

Natalie

1 years ago

I disagree with Glendora. I believe issuing a nonconvertible debenture actually decreases net worth.

upvoted 0 times

...

Glendora

1 years ago

I think when a corporation issues a nonconvertible debenture, it increases its net worth.

upvoted 0 times

...