The structure of competitive forces establishes the profitability of an industry. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
________ is/are a short-term, generally unsecured. corporate IOUs issued by the “most credit-worthy” firms. A) Repurchase agreements B) Commercial paper C) Negotiable CDs D) Treasury bills ANSWER B
Date: September 19th, 2020
Due to regulatory capital requirements, there tends to be a concentration of preferred shares in the ________ industry. A) airline B) railroad C) power generation D) banking ANSWER D
Date: September 19th, 2020
A major assumption of breakeven analysis and one which causes severe limitations in its use is that ________. A) fixed costs really are fixed B) total revenue is nonlinear C) revenues and operating costs are linear D) all costs are really semi-variable ANSWER C
Date: September 19th, 2020
The effective interest rate generally is ________. A) higher on a loan if interest is paid at maturity B) lower if the loan is a discount loan C) higher if the loan is a discount loan D) not affected by whether the loan is a discount loan or a loan with interest paid at maturity […]
Date: September 19th, 2020
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
Which of the following statements comparing preferred stock to other financial instruments is NOT true? A) Like common shares, preferred dividends are after-tax payments for the firm. B) Like bonds, preferred shares are issued with a face value. C) Like bonds, most preferred shares have maturities of up to 30 years. D) Like common shares, […]
Date: September 19th, 2020
The prime rate of interest fluctuates with ________. A) the changing supply-and-demand relationship for long-term funds B) the changing supply-and-demand relationship for short-term funds C) the liquidity requirement in a money market D) the demand in a bond market ANSWER B
Date: September 19th, 2020
In the Modigliani and Miller world where we now assume that taxes exist, and that interest payments are tax deductible for firms, then which of the following statements is TRUE? A) VL = VU – Dt B) VU = VL + Dt C) VL = VU + Dt D) VU = VL – Dt […]
Date: September 19th, 2020
An analysis of the industry’s technological improvements can help managers better identify which of these trends are occurring within a particular industry? A) Major efficiency gains. B) Reductions in overhead C) Lower production costs D) All of the above ANSWER A
Date: September 19th, 2020
