Wilson’s has 10,000 shares of common stock outstanding at a market price of $35 a share. The firm also has a bond issue outstanding with a total face value of $250,000 which is selling for 102 percent of face value. The cost of equity is 11 percent while the pre-tax cost of debt is 8 […]
Date: September 19th, 2020
Finance is: A) The study of investment management B) The study of the stock exchange C) The study of the capital market and its many players D) The study of money management for personal use ANSWER C
Date: September 19th, 2020
An IRA contribution may defer taxes on current income. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Gillian’s Boutique has 850,000 shares of common stock outstanding at a market price of $16 a share. The company also has 15,000 bonds outstanding that are quoted at 98 percent of face value. What weight should be given to the common stock when Gillian’s computes their weighted average cost of capital? Round answer to nearest […]
Date: September 19th, 2020
Referring to Cool Looks, what are total cash disbursements in October? A) $13,950 B) $17,050 C) $20,950 D) $27,950 E) $28,950 ANSWER A
Date: September 19th, 2020
Referring to Gerald’s Produce, what is Gerald’s ending cash balance expected to be in March? A) $15,400 B) $16,700 C) $17,000 D) $17,700 E) $18,200 ANSWER B
Date: September 19th, 2020
Money market securities have maturities of one year or less. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Jack’s Construction Co. has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yielding 8.5 percent. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is yielding 4 percent and the […]
Date: September 19th, 2020
What is the weighted average cost of capital after taxes for Moss Diet Centers if the target weights are 25% equity and 75% debt, and the costs of equity and after-tax debt are 15% and 12%, respectively? Assume the relevant tax rate is 20%. A) 12.5% B) 11.0% C) 12.8% D) 14.0% E) 13.5% […]
Date: September 19th, 2020
Reservists who experience a drop in income may be able to access retirement accounts without a tax penalty. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
