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| James Wills, the treasurer of a major multinational company, needs to borrow $50 million to finance new production facilities. Wills is deciding between direct financing or a public offering. All of the following statements in regard to these two alternatives are correct except that A. The rating assigned by Standard & Poor’s or Moody’s is critical in pricing public debt. B. Private debt is issued to sophisticated investors such as insurance companies. C. Public debt tends to have higher interest rates because of its lower liquidity. D. Public debt needs to be registered with the SEC, a time-consuming and costly process. |