Preferred shares are a form of SHORT-TERM financing available to the firm. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
What are Michael Porter’s Five Forces that govern the competition within an industry? How do these forces impact overall growth opportunities within an industry? What will be an ideal response? ANSWER Porter Five Forces are: 1. The threat of new entrants, 2. The threat of substitute products or services, 3. The bargaining power […]
Date: September 19th, 2020
________ describes a legal state whereby a firm cannot pay its creditors A) Capital distress B) Bankruptcy C) Liquification D) Capital structure ANSWER B
Date: September 19th, 2020
Sizing up operation management involves: A) identifying the firm’s strengths and weaknesses related to operations. B) an external assessment of the industry. C) an internal assessment of the firm’s strengths and weaknesses. D) All of the above. ANSWER A
Date: September 19th, 2020
________ ensure that money lent under a line of credit agreement is actually being used to finance seasonal needs. A) Operating-change restrictions B) Annual cleanups C) Compensating balances D) Commitment fees ANSWER B
Date: September 19th, 2020
Under terms of the U.S. federal bankruptcy code, chapter ________ call for a ________ pr. A) 11; liquidation B) 7; reorganization C) 7; liquidation D) None of the above ANSWER C
Date: September 19th, 2020
________ is the process whereby the firm sells receivables to a lender at a discount (say 2 percent) to the actual value of the receivables. Customers then repay the money they owe to the firm directly to the lender instead. A) Factoring of payables B) Loan sharking C) Bridge loaning D) Factoring of receivables […]
Date: September 19th, 2020
Assume an M&M world with taxes where the corporate tax rate is 25%, the before tax required return on debt is 8%, the required return on the unlevered firm is 12%, and the firm is financed 20% with debt and 80% with equity. What is the required return on equity? A) 12.75% B) 15.00% C) […]
Date: September 19th, 2020
The ________ is, in theory, the interest rate offered to a bank’s most credit worthy customers. A) LIBOR B) prime rate C) promissory rate D) bridge rate ANSWER B
Date: September 19th, 2020
How is the typical profitability of a stage 2 firm different from a stage 1 and a stage 3 firm? What will be an ideal response? ANSWER Stage 1 represents the initial or start-up stage of firms within a particular industry. At this point, the firms tend to have very low demand and […]
Date: September 19th, 2020
