Question

Private placement of debt securities occurs more frequently in:

Multiple Choice

• firms that are using venture capitalists.

• larger-sized firms.

• smaller-sized firms.

• combination with convertible bonds.

Answer 1

Private placement of debt securities occur more frequently in :

Smaller sized firms

Explanation :-

Smaller firms can mostly raise funds from private placement of debt securities because it is not easy for smaller companies to raise funds from public by issuing the debt securities to public , as the securities must be listed and the investors are also not interested to invest in smaller company's bonds or debt securities .

So, Smaller companies prefer to raise funds from private placement of debt to selected investors .