Due primarily to concerns about financial distress, we tend to see very few firms financed with ________ or more of their capital structure as debt. A) 20% B) 35% C) 55% D) 70% ANSWER D
Date: September 19th, 2020
A firm’s operating breakeven point is the point at which ________. A) total operating costs equal total fixed costs B) total operating costs are zero C) EBIT is less than sales D) EBIT is zero ANSWER D
Date: September 19th, 2020
In an M&M world with taxes, as a firm takes on ________ debt, the cost of equity ________. A) more; decreases. B) more; increases. C) less; increases. D) less; remains the same. ANSWER B
Date: September 19th, 2020
Which of the following statements is NOT true?A line-of-credit from a commercial bank: A) generally has a maximum stated amount available to the borrower. B) generally charges the borrower interest only for the amount actually utilized C) once granted generally never needs to be renewed. D) is often an alternative to and/or in addition to […]
Date: September 19th, 2020
A firm has fixed operating costs of $525,000. The sales price per unit is $35 and its variable costs per unit is $22.50. The firm’s operating breakeven point in units is ________. A) $23,330 B) $32,000 C) $42,000 D) $52,000 ANSWER C
Date: September 19th, 2020
Ransom Industries Inc, has issued preferred stock that pays $3.00 dividends annually. If the market requires a 12.5% rate of return on the shares, what is the current price of the firm’s preferred shares? A) $21.33 B) $24.00 C) $41.67 D) There is not enough information to answer this question. ANSWER B Explanation: […]
Date: September 19th, 2020
A ________ is an agreement between a commercial bank and a business that states the maximum amount of unsecured short-term borrowing the bank will make available to the firm over a given period of time, provided sufficient funds are available. A) revolving credit agreement B) line of credit C) commercial paper D) single payment note […]
Date: September 19th, 2020
The ________ feature found with many issues of preferred stock requires that all current and past due preferred dividends must be paid prior to any dividend payout to common shareholders. A) cumulative B) participating C) convertible D) historical ANSWER A
Date: September 19th, 2020
Which of the following is NOT a question related to an industry analysis? A) How close is the firm to full capacity? B) In what industry life cycle is the firm? C) How profitable is the industry? D) What are the overall prospects for revenue frowth and increased profitability in the industry? ANSWER […]
Date: September 19th, 2020
All of the political factors can give managers further insights into the opportunities and risks facing a particular industry EXCEPT: A) favorable tax changes or incentives in the industry. B) pending and new government relations. C) nature and intensity of competition. D) demographic changes in the population. ANSWER C
Date: September 19th, 2020
