Teri’s Tires has 7 percent preferred stock outstanding that sells for $68 a share. The preferred stock has a $100 par value. What is Teri’s cost of preferred stock? A) 9.52 percent B) 9.71 percent C) 10.29 percent D) 10.78 percent E) 11.76 percent ANSWER C
Date: September 19th, 2020
Compounding refers to the A) mistake of confusing present values with future values. B) process of accumulating value over time. C) task of finding a present value. D) projection of future payments. ANSWER B
Date: September 19th, 2020
The underlying cause of ranking conflicts between the NPV and IRR methods is differing: A) Initial cost. B) Reinvestment rate assumption. C) Cash flow timing. D) Profitability indices. E) Errors in calculating the discount rate. ANSWER B
Date: September 19th, 2020
Lenders may require escrow accounts to ensure that property taxes and insurance premiums are paid. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
In order for a government to establish an effective estate tax, it is necessary that there be A) a progressive income tax. B) a regressive income tax. C) an inheritance tax. D) a gift tax. ANSWER D
Date: September 19th, 2020
For a given level of EBIT, greater changes in EPS produce A) a decline in the degree of operating leverage. B) a decline in the degree of financial leverage. C) an increase in the degree of operating leverage. D) no effect on any type of leverage. E) an increase in the degree of financial leverage. […]
Date: September 19th, 2020
Your right to a home inspection need not be specified in the purchase contract. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A decline in used car prices may increase end-of-lease payments under a closed-end lease. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
If EBIT increases 15%, EPS increases by 30%, debt increases by 45%, and the tax rate declines by 5%, what is the degree of financial leverage? A) 2 B) 1 C) 9 D) 3 E) 6 ANSWER A
Date: September 19th, 2020
A financial analyst is the same as a financial planner. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
