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
Referring to Cool Looks, what are total cash inflows in September? A) $18,000 B) $20,000 C) $30,000 D) $38,000 E) $50,000 ANSWER D
Date: September 19th, 2020
Which of these is not one of the basic questions for corporate finance? A) How should we raise the money? B) What are we going to make? C) What do we do with our profits? D) How big of a bonus should we get? ANSWER D
Date: September 19th, 2020
The initial outlays and operating costs of large projects can be forecast with great accuracy, but revenues are more uncertain and large errors are not uncommon. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Peter’s Audio Shop has a cost of debt of 7 percent, a cost of equity of 11 percent, and a cost of preferred stock of 8 percent. The firm has 104,000 shares of common stock outstanding at a market price of $20 a share. There are 40,000 shares of preferred stock outstanding at a market […]
Date: September 19th, 2020
A project having the conventional pattern of cash flows exhibits all of the following EXCEPT A) a terminal cash flow. B) initial investment. C) operating cash outflows. D) operating cash inflows. ANSWER C
Date: September 19th, 2020
Which one of these would a financial advisor say is most important? A) Making decent dough over the long haul B) Making a quick buck C) Avoiding paying taxes whenever possible D) Properly financing a large purchase ANSWER A
Date: September 19th, 2020
