Which of the following is considered in designing a dividend policy that is favorable to wealthy owners? A) the tax status of the firm’s owners B) the political risk of the firm C) the liability of the firm’s owners D) the reinvestment risk of the firm ANSWER A
Date: September 19th, 2020
The following statements are all true EXCEPT: A) dividends are paid from net income. B) dividends represent a use of cash and do not have to be paid if a firm has a net loss. C) dividends are paid to a firm’s stockholders, both preferred and common stockholders, are tax-deductible to the paying company. D) […]
Date: September 19th, 2020
The market rewards firms that adopt a fixed or increasing level of dividends rather than a fixed dividend payout policy through higher share prices. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Highland Construction works primarily on new home construction but has become aware of new and potentially profitable construction activities in multi-home structures such as 20-unit apartment buildings. This type of construction would be a new activity for the firm. The President of the firm believes the firm could do a number of things related to […]
Date: September 19th, 2020
Which of the following capital budgeting techniques does NOT specifically use time value of money analysis? A) payback period B) net present value C) internal rate of return D) modified internal rate of return ANSWER A
Date: September 19th, 2020
Most individuals are NOT risk-averse. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
________ ratios are a form of leverage-related ratios. A) Profitability B) Liquidity C) Market D) Coverage ANSWER D
Date: September 19th, 2020
Standard deviation is the practice of combining assets or investments in order to reduce risk. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Tangshan Mining has common stock at par of $200,000, paid-in capital in excess of par of $400,000, and retained earnings of $280,000. In states where the firm’s legal capital is defined as the par value of common stock, the firm could pay out ________ in cash dividends without impairing its capital. A) $200,000 B) $680,000 […]
Date: September 19th, 2020
Which of the following best represents operating income? A) Income after financing activities B) Earnings before interest and taxes C) Income from capital gains D) Income from discontinued operations ANSWER B
Date: September 19th, 2020
