Demand risk refers to the probability that actual supply for the products or services will exceed anticipated supply. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Financial leverage may be defined as the potential use of variable financial costs to magnify the effects of changes in earnings before interest and taxes (EBIT) on a firm’s earnings per share (EPS). Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The effect of financial leverage is such that an increase in a firm’s earnings before interest and taxes (EBIT) results in a more than proportional increase in the firm’s earnings per share (EPS), while a decrease in the firm’s EBIT results in a less than proportional decrease in EPS. Indicate whether the statement is true […]
Date: September 19th, 2020
________ occurs when a firm buys back some of its own common shares. A) A leveraged buyout B) An IPO C) A share repurchase D) Secondary offering ANSWER C
Date: September 19th, 2020
A public equity offering A) makes the securities being issued available to “retail” investors. B) makes the securities being issued available to large institutional investors. C) is usually more expensive than a private placement. D) All of the above are true. ANSWER D
Date: September 19th, 2020
Whenever the percentage change in earnings per share (EPS) resulting from a given percentage change in sales is greater than the percentage change in sales, financial leverage exists. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following statements regarding a share repurchase is NOT true? A) Share repurchases occur most commonly as open market repurchases. B) The firm typically buys its shares just like any investor would purchase stocks listed on a stock exchange. C) A firm often announces its intention to repurchase a certain number of its […]
Date: September 19th, 2020
Value proposition refers to a statement that describes the unique features of the firm’s products and services. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Commercial paper issues have maturities ranging from ________. A) six months to one year B) one year to three years C) three days to 270 days D) 0 to 30 days ANSWER C
Date: September 19th, 2020
In doing business in foreign countries, financing operations in the local market not only improves the company’s business ties to the host community but also minimizes exchange rate risk. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
