Candy Corporation had pretax profits of $1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of $50,000. There were 100,000 shares outstanding and no interest expense. What was Candy Corporation’s earnings per share? A) $3.91 B) $4.52 C) $7.42 D) $7.59 ANSWER C
Date: September 19th, 2020
A normal yield curve is upward-sloping and indicates generally cheaper short-term borrowing costs than long-term borrowing costs. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The liquidity preference theory suggests that for any given issuer, long-term interest rates tend to be higher than short-term rates due to the lower liquidity and higher responsiveness to general interest rate movements of longer-term securities; this causes the yield curve to be upward-sloping. Indicate whether the statement is true or false ANSWER […]
Date: September 19th, 2020
The ________ represents a summary statement of a firm’s financial position at a given point in time. A) income statement B) balance sheet C) statement of cash flows D) statement of retained earnings ANSWER B
Date: September 19th, 2020
The components of risk premium includes business risk, financial risk, interest rate risk, liquidity risk, and tax risk. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The nominal rate of interest on a bond is 7% and an inflation premium of 3%. This results in a real rate of interest of 4% on the bond. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Operating profit is known as ________. A) earnings after interest and taxes B) earnings before interest and taxes C) earnings before depreciation and taxes D) earnings after tax ANSWER B
Date: September 19th, 2020
In theory, the rate of return on U.S. Treasury bills should always exceed the rate of inflation as measured by the consumer price index. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Earnings available for common stockholders is calculated as net profits ________. A) before taxes minus preferred dividends B) after taxes minus preferred dividends C) after taxes minus common dividends D) before taxes minus common dividends ANSWER B
Date: September 19th, 2020
The nominal rate of interest is the actual rate of interest charged by the supplier of funds and paid by demander. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
