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
Preferred shares earn their name in part because they have priority payment over: A) short-term debt obligations. B) long-term debt obligations. C) common stock dividends. D) all of the above. ANSWER C
Loans on which the interest is paid in advance are often called ________. A) premium loans B) long-term loans C) term deposits D) discount loans ANSWER D
Seasonal buildups of inventory and receivables are generally financed with ________. A) short-term loans B) long-term loans C) retained earnings D) stockholders’ equity ANSWER A
If a firm’s variable costs per unit increase,the firm’s ________. A) financial breakeven point will decrease B) operating breakeven point will increase C) sale price per unit will decrease D) fixed costs per unit will increase ANSWER B
If a firm’s fixed financial costs decrease, the firm’s operating breakeven point will ________. A) decrease B) increase C) remain unchanged D) change based on the sale price per unit ANSWER C
What is LIBOR, how are LIBOR interest rates determined, and for what are they used? What will be an ideal response? ANSWER LIBOR is the London Interbank Offered Rate and is a series of short-term interest rates estimated daily in London by a group of large international banks. Unfortunately, the LIBOR rates (currently […]
What are taxes payable for the Equity and Debt firm? A) $240,000 B) $560,000 C) $300,000 D) $0 ANSWER A Explanation: A) Taxes payable = EBT * Tax rate = $800,000 * .30 = $240,000.
The least frequently issued capital financial instruments listed herein are: A) preferred shares. B) common shares. C) bonds. D) In reality, these instruments are issued in similar magnitude. ANSWER A
A PEST analysis involves an analysis of which of these factors? A) Technological, societal, economic factors, and potential threats B) Societal, technological, political, and economic factors C) Strengths, threats, economic and political factors D) Strengths, threats, potential opportunities, and external environment factors ANSWER B
