Finance

Which of the following is true of an aggressive funding strategy of a

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 […]

Read full post

Date: September 19th, 2020

Which of the following is NOT considered an advantage of going public?

Which of the following is NOT considered an advantage of going public? a. Sharing corporate control with outsiders. b. Better access to both equity and debt markets in the future c. Better liquidity for the firm’s shares d. The firm’s entrepreneurs have a chance to liquidate part of their investment and diversify.     ANSWER […]

Read full post

Date: September 19th, 2020

Harry Trading Company must choose its optimal capital structure. Curre

Harry Trading Company must choose its optimal capital structure. Currently, the firm has a 20 percent debt ratio and the firm expects to generate a dividend next year of $5.44 per share. Dividends are expected to remain at this level indefinitely. Stockholders currently require a 12.1 percent return on their investment. Harry is considering changing […]

Read full post

Date: September 19th, 2020

Which of the following is NOT generally considered a cost of going pub

Which of the following is NOT generally considered a cost of going public? a. Underpricing: IPOs appear to be substantially underpriced. b. Competition: Now that the firm is more visible, industry rivals will compete more intensively. c. Issuance Costs: The typical underwriter spread for an IPO is 7% of the offering proceeds. d. Management’s time […]

Read full post

Date: September 19th, 2020