If bond and stock markets are efficient, then the timing of when to issue debt or equity should not matter. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
An investor currently holds the following portfolio: Amount Invested 8,000 shares of Stock A $16,000 Beta = 1.3 15,000 shares of Stock B $48,000 Beta = 1.8 25,000 shares of Stock C $96,000 Beta = 2.2 The investor is worried that the beta of his portfolio is too high, so he wants to sell some […]
Date: September 19th, 2020
ABC Company purchased an ISO Commercial General Liability Policy. The agent who sold ABC the coverage noted that the coverage trigger in this policy was different from the trigger in the previous policy. The new policy covers only those claims which are first reported during the policy period, provided the event occurred after a retroactive […]
Date: September 19th, 2020
The primary purpose of the monthly review and control is A) to indicate future revised spending amounts, assuming some prior variances. B) to revise action plans. C) to identify family members causing unfavorable variances. D) make sure the previous month’s budget is balanced. ANSWER A
Date: September 19th, 2020
Wendy purchased 800 shares of Genetics Stock at $3 per share on 1/1/12. Wendy sold the shares on 12/31/12 for $3.45. Genetics stock has a beta of 1.9, the risk-free rate of return is 4%, and the market risk premium is 9%. Wendy’s holding period return is A) 15.0%. B) 16.5%. C) 21.1%. D) 17.6%. […]
Date: September 19th, 2020
Which of the following statements is true concerning the ISO employment-related practices liability form? A) Coverage is provided without a co-payment provision. B) Legal defense costs are included as part of the policy limit. C) Wrongful termination is excluded from coverage. D) Liability to employees is excluded from coverage. ANSWER Answer: B
Date: September 19th, 2020
Table 3-3 Marlett Company Financial Information December 2009 December 2010 Net Income $2,000 $4,000 Accounts receivable 750 1,250 Accumulated depreciation 1,000 1,400 Common stock 4,500 5500 Paid-in capital 7,500 8500 Retained earnings 1,500 3,500 Accounts payable 750 950 Based on the information in Table 3-3, prepare a statement of cash flows for 2010. Assume that […]
Date: September 19th, 2020
The ________ is the maximum a firm can grow with internally generated equity and new borrowing sufficient to maintain the current long-term-debt to equity ratio. A) internal growth rate B) sustainable growth rate C) return on equity D) return on assets ANSWER B
Date: September 19th, 2020
All of the following forms of business organizations provide limited liability to all owners EXCEPT A) S-type corporation. B) limited partnership. C) limited liability company. D) corporation. ANSWER B
Date: September 19th, 2020
Jenkins Company purchased a commercial umbrella policy with a $10 million limit and a $100,000 self-insured retention. The insurer required Jenkins Company to carry a $1 million per-occurrence limit on its general liability policy and a $1 million per-occurrence limit on its business auto policy. Jenkins purchased these required limits. A Jenkins driver was negligent […]
Date: September 19th, 2020
