The call option in a bond has a greater chance of being exercised (to the detriment of the bondholder) if market interest rates have fallen since the bond was issued. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Since preferred stock is a form of ownership, it has no maturity date. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The conversion feature of a bond is a feature that is included in all corporate bond issues that gives the issuer the opportunity to repurchase bonds at a stated price prior to maturity. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Preferred stockholders must receive their stated dividends prior to the distribution of any earnings to common stockholders and bondholders. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Nico Corporation has annual purchases of $300,000 and accounts payable of $30,000, then average purchases per day are ________ and the average payment period is ________. A) 36.5; 821.9 B) 36.0; 833.3 C) 821.9; 36.5 D) 833.3; 36.0 ANSWER C
Date: September 19th, 2020
A firm with a total asset turnover lower than industry standard may have ________. A) excessive debt B) excessive interest costs C) insufficient sales D) insufficient fixed assets ANSWER C
Date: September 19th, 2020
________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm. A) Employees B) Stockholders C) Lenders and suppliers D) Auditors ANSWER C
Date: September 19th, 2020
Incremental cash flows represent the additional cash flows expected as a direct result of the proposed project. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
To sell a callable bond, the issuer must pay a higher interest rate than on an otherwise equivalent noncallable bond. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A call feature in a bond allows the issuer the opportunity to repurchase bonds at a stated price prior to maturity, and this option has a greater chance of being exercised (to the benefit of the bondholder) if market interest rates have fallen since the bond was issued. Indicate whether the statement is true or […]
Date: September 19th, 2020
