Diamond Electronics Inc. has a current price of $18.45 per share for its preferred shares that pay an annual dividend of $0.96. What is the current return on the firm’s preferred shares? A) 5.20% B) 19.22% C) 8.74% D) There is not enough information to answer this question. ANSWER A Explanation: A) r […]
Date: September 19th, 2020
Spontaneous unsecured financing has a specific interest cost associated with it that can be at a fixed or floating rate. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
By calling the additional dividend an extra dividend, a firm avoids setting expectations that the dividend increase will be permanent. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Use the information in Table 4.1 to determine the 2013 dividend payout ratio for Bacon Signs. A) This question cannot be answered from the information provided. B) $250/$7418 = 0.03 C) $463/$713 = 0.65 D) $250/$713 = 0.35 ANSWER D Explanation: D) DPO Ratio = (Div)/NI = $250/$713 = 0.35
Date: September 19th, 2020
In credit terms, EOM (End-of-Month) indicates that the accounts payable must be paid by the end of the month in which the merchandise has been purchased. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Based on the selected financial information for Coffeeberry Coffeehouse, calculate net income for 2012. A) $100 B) $900 C) $500 D) $300 ANSWER B Explanation: B) NI = Div + Addition to R/E = $700 + ($6,350 – $6,150 ) = $900.
Date: September 19th, 2020
The ________ is cited by the author as a reason for using just one rate, a long-term yield, as the average cost of debt financing for a firm that has multiple issues of debt with varying maturities. A) efficient markets hypothesis B) market substitution theory C) biased expectation theory D) unbiased expectations theory […]
Date: September 19th, 2020
The costs associated with the issuance of debt, or flotation costs, are generally of secondary consideration and are typically ignored in cost of debt estimates. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
According to ________, investors’ demands for dividends fluctuate over time. A) the catering theory B) Modigliani and Miller theory C) the residual theory of dividends D) CAPM theory ANSWER A
Date: September 19th, 2020
Use the information in Table 4.1 to determine the 2013 current ratio for Bacon Signs. A) $3,908/$2,943 = 1.33 B) $3,527/$2,250 = 1.57 C) $3,170/$2,943 = 1.08 D) $713/$2,943 = 0.24 ANSWER A Explanation: A) CR = CA / CL
Date: September 19th, 2020
