Certain financing plans are termed conservative when ________. A) short-term financing is used frequently B) working capital is relatively high C) current assets are relatively low D) risk is increased ANSWER B
Date: September 19th, 2020
The firm’s annual financing costs of the aggressive financing strategy are ________. (See Table 14.1) A) $21,175 B) $26,075 C) $24,475 D) $22,775 ANSWER B
Date: September 19th, 2020
An important aspect of insiders’ commitment to continuing ownership is the , whereby insiders agree to hold their shares for a period (typically 180 days) after the IPO date. a. ownership commitment b. signaling agreement c. statue quo agreement d. lockup provision ANSWER D
Date: September 19th, 2020
The firm’s annual financing costs of conservative financing strategy are ________. (See Table 14.1) A) $22,775 B) $26,075 C) $26,775 D) $21,175 ANSWER C
Date: September 19th, 2020
An IPO firm has a choice of two methods of selling shares. In the (i) method, the underwriter essentially acts as a (ii), agreeing to purchase all shares offered at a fixed price, and then takes the risk of reselling the shares to the public. In the (iii) method, the underwriter essentially acts as a […]
Date: September 19th, 2020
If the firm’s current liabilities in June were $37,000, the net working capital was ________.(See Table 14.1) A) $20,000 B) $21,500 C) $23,000 D) $38,000 ANSWER D
Date: September 19th, 2020
Which of the following is true of an aggressive funding strategy of a firm? A) Under an aggressive funding strategy, a firm funds it seasonal requirements with bonds and long-term loans. B) Under an aggressive funding strategy, a firm funds its seasonal requirements with short-term debt. C) Under an aggressive funding strategy, a firm funds […]
Date: September 19th, 2020
Nutrition, Inc, a vitamin supplement manufacturer, is financed entirely with equity that is currently privately owned by its managers. The firm is expected to generate earnings of $5 mn. per year into perpetuity, and all earnings are paid out in dividends. The owner-managers receive no additional compensation. For all of the owner-managers, their shares of […]
Date: September 19th, 2020
An increase in the current asset to total asset ratio will result in ________. A) an increase in profit B) an increase in risk C) a decrease in risk D) a decrease in profit ANSWER C
Date: September 19th, 2020
In an IPO, the option allows the underwriter to sell additional shares if it is profitable to do so. a. overallotment b. offer extension c. continuance d. prolongation ANSWER A
Date: September 19th, 2020
