Finance

Why should we be more concerned with the marginal tax rate rather than

Why should we be more concerned with the marginal tax rate rather than the average tax rate? What will be an ideal response?     ANSWER For financial decision making, it’s the marginal tax rate rather than the average tax rate that we are concerned with. Why? Because, generally speaking, the marginal rate is the […]

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Date: September 19th, 2020

Examine the securities below and identify the security with the highes

Examine the securities below and identify the security with the highest liquidity premium, the highest default risk premium, and the highest maturity premium. a. 30-year U.S. Government Treasury bond maturing in 2025 b. 25-year Bbb-rated corporate bond maturing in 2030, actively traded on the New York Exchange c. 10-year Aaa-rated corporate bond maturing in 2020, […]

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Date: September 19th, 2020

Cranston Cranks Inc. is a manufacturer of high quality bicycle compone

Cranston Cranks Inc. is a manufacturer of high quality bicycle components. The firm’s levered beta is equal to 1.20. When added to a well-diversified portfolio that matches the market beta, the firm would ________ the portfolio beta. A) increase B) decrease C) not affect D) There is insufficient information to answer this question.     […]

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Date: September 19th, 2020

High Inc. has an accounts receivable turnover ratio of 7.3. Low Compan

High Inc. has an accounts receivable turnover ratio of 7.3. Low Company has an accounts receivable turnover ratio of 5. Assuming that High and Low have the same sales level, which of the following statements is correct? A) Low Company has (on average) a lower accounts receivable balance than does High. B) High has a […]

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Date: September 19th, 2020

Which of the following statements is TRUE? A) An advantage of a corpo

Which of the following statements is TRUE? A) An advantage of a corporation is that there is less regulation of the business. B) An advantage of a corporation is that it is subject to double taxation. C) Unlike a partnership, a disadvantage of a corporation is that it has limited liability. D) Corporations face more […]

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Date: September 19th, 2020