Finance

Which of the following would be classified as equity financing for a f

Which of the following would be classified as equity financing for a firm? A) Preferred shareholders, banks, and nonbank lenders B) Nonbank lenders, common shareholders, and commercial banks C) Preferred shareholders, common shareholders, and retained earnings D) Suppliers, nonbank lenders, and commercial banks     ANSWER Answer: C Explanation: C) Bank and nonbank lenders, as […]

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Date: September 19th, 2020

Which of the following is the correct order in which corporations gene

Which of the following is the correct order in which corporations generally raise funds to enhance the wealth of stockholders and to send positive signals to the market? A) retained earnings, equity, debt B) retained earnings, debt, equity C) debt, retained earnings, equity D) equity, retained earnings, debt     ANSWER B

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Date: September 19th, 2020

Which of the statements below is NOT true? A) Preferred stock is a fo

Which of the statements below is NOT true? A) Preferred stock is a form of hybrid equity financing. B) Retained earnings are a form of hybrid equity financing. C) Common stock is a form of equity financing. D) Corporate bonds are a form of debt financing.     ANSWER Answer: B Explanation: B) Retained earnings […]

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Date: September 19th, 2020

The weighted average cost of capital is ________. A) the average of t

The weighted average cost of capital is ________. A) the average of the cost of each financing component, weighted by the proportion of each component B) the cost of capital for the firm as a whole C) made up of three financing components: the cost of debt, the cost of preferred stock, and the cost […]

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Date: September 19th, 2020