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
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
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
________ is/are the most common form of short-term financing for a small and medium sized firms. A) Commercial paper B) Banker’s acceptances C) Short-term bank loans, or promissory notes, D) New common stock ANSWER C
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
