The value of real option analysis comes from the value of time (to wait and make a decision) and from the riskiness of the project. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
In a 2-for-1 stock split, the number of shares outstanding decreases by fifty percent and the stock’s per share par value will double. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The process whereby every transaction or event has at least two accounting entries is known as: A) the accounting equation. B) ledger accounting. C) double-entry bookkeeping. D) the cash equation. ANSWER C
Date: September 19th, 2020
The CAPM incorporates the risk-free rate with the market risk premium and beta, a relative risk measure. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The simple accounting equation may be written as: A) liabilities = assets + equity. B) assets = liabilities + equity. C) equity = liabilities + assets. D) assets = liabilities – equity. ANSWER B
Date: September 19th, 2020
The appropriate hurdle rate for a particular project reflects the perceived riskiness of the project. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Reverse stock splits are initiated when a stock is selling at a very low price to appear respectable. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The thirty firms that comprise the Dow Jones Industrial Average all have remarkably similar betas. In fact, the thirty betas range from a low of 0.91 to a high 1.11. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Ashley’s Delivery Service is analyzing the credit terms of each of three suppliers, A, B, and C. (a) Determine the approximate cost of giving up the cash discount (assume a 360-day year). (b) Assuming the firm needs short-term financing, recommend whether or not the firm should give up the cash discount or borrow from the […]
Date: September 19th, 2020
Paying a stock dividend ________. A) decreases the retained earnings account B) has no effect on the retained earnings account C) increases the retained earnings account D) reorganizes the income ANSWER B
Date: September 19th, 2020
