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kvv77 [185]
3 years ago
7

Because it is normally unsecured, commercial paper is only offered by firms with no credit ratings. True False

Business
1 answer:
Valentin [98]3 years ago
6 0

Answer:

False

Explanation:

The above statement is false that , because it is normally unsecured , commercial paper is only offered by firms with no credit ratings.

Commercial paper is an unsecured promissory note issued by the good reputed companies .  It is for short term . The time period of commercial paper is 15 days to 12 months .

A company cannot issue commercial paper if the credit rating is no longer . The face value of commercial paper is of rupees five lakh . It is minimum face value. The rates of commercial paper is usually cheaper . The commercial paper is liquid because of its less risk quality.

The commercial paper also provide<em> exit option to the investors </em>. They also reduce the cost of capital for the company. They are <em>very effective</em> for those who need<em> money in urgent</em> as they are quick way for raising money.

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