Because it pays higher interest, a CD is considered more liquid than a passbook savings account. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following statements concerning Social Security survivor benefits is false? A) Only widows with a young child are entitled to benefits. B) Survivor benefits are based on the historic earnings of the deceased. C) A dependent parent age 62 or above may receive benefits. D) To be eligible for survivors’ benefits the deceased […]
Date: September 19th, 2020
Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the best interests of the owners, rather than in their self-interests. What strategies are available to shareholders to help ensure that managers are motivated to make decisions in the interest of shareholders? ANSWER Generally speaking shareholders […]
Date: September 19th, 2020
Blanton Corporation increased its financial leverage during 2010 by taking out a loan and using the proceeds to buy back common stock. At the end of 2010, the corporation reported higher earnings per share and higher return on equity. However, its stock price declined. Discuss why this may happen. ANSWER Financial leverage is […]
Date: September 19th, 2020
Which of the following equations for the Book value Plus Adjustment method is correct? A) Value of equity (VE) = market value of equity – adjustments B) Value of equity (VE) = book value of equity + adjustments C) Value of equity (VE) = book value of equity – adjustments D) Value of equity (VE) […]
Date: September 19th, 2020
A company borrows $10,000 and puts the money into its checking account. This transaction will increase the company’s current ratio if prior to the transaction the company’s current ratio was A) greater than one. B) greater than or less than one, but not equal to one. C) less than one. D) equal to one. SAY. […]
Date: September 19th, 2020
Michael received a professional baseball contract paying $7,000,000 per year for 5 years, Bert received a two-year contract for $16,000,000 per year. For purposes of calculations, treat these contracts as ordinary annuities. Who’s contract has a greater present value if we assume a discount rate of 6%? A) Bert = $29,334,283 B) Michael = $29,486,547 […]
Date: September 19th, 2020
If we invest money for 10 years at 8 percent interest, compounded semiannually, we are really investing money for 20 six-month periods, and receiving 4 percent interest each period. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
If the beta for stock A equals zero, then A) stock A’s required return is equal to the required return on the market portfolio. B) stock A has a guaranteed return. C) stock A’s required return is greater than the required return on the market portfolio. D) stock A’s required return is equal to the […]
Date: September 19th, 2020
The family maintenance fund should not include A) those expenses that were independently consumed by the insured. B) all expenses that were jointly consumed by the insured and potential survivors. C) all expenses that were independently consumed by potential survivors. D) expenses that were either jointly consumed by both potential survivors and the insured. […]
Date: September 19th, 2020
