Which statement is true about medical expense coverage under the boatowners package policy? A) It pays the medical expenses of a covered person who is injured while in the boat. B) It pays the medical expenses of another boat operator who is injured as a result of negligent operation of the boat by the insured. […]
Date: September 19th, 2020
Which of the following statements is MOST correct concerning flotation costs? A) Flotation costs are the same for common stock, preferred stock and bonds because they reflect mainly printing costs and legal fees. B) Flotation costs are higher for common stocks than for preferred stocks and bonds due to the higher level of risk associated […]
Date: September 19th, 2020
Adding stocks to a bond portfolio will increase the riskiness of the portfolio because stocks have higher standard deviations of returns than bonds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following statements is TRUE? A) Issuing equity automatically hurts existing shareholders. B) Equity is less expensive than debt because of the dividend tax shield found with equity. C) If a firm takes on a positive NPV project financed with new equity, existing shareholders will benefit. D) All of the above are true. […]
Date: September 19th, 2020
What does it mean to “maximize the value of the firm”? In general, how is value created? What factors determine value and how does each affect the value of the firm? What will be an ideal response? ANSWER To maximize the value of the firm most commonly means to maximize the market capitalization […]
Date: September 19th, 2020
A pro forma ________ forecasts the timing and amount of cash inflows and cash outflows. A) income statement B) balance sheet C) cash budget D) annual report ANSWER C
Date: September 19th, 2020
Which of the following statements is (are) true about the National Flood Insurance Program? I. You can’t purchase flood insurance through this program if your property is located in a high-flood-risk area. II. Coverage is not available for any property which has been flooded previously. A) I only B) II only C) both I and […]
Date: September 19th, 2020
Based on the information in Table 4-1, the debt ratio is A) 32.6%. B) 24.1%. C) 55.2%. D) 45.0%. ANSWER D
Date: September 19th, 2020
Generally accepted accounting principles (GAAP) require finance statements prepared on a cash basis because these statements are most useful for investors and managers. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Frank purchased a building in a run-down area of a city. When Frank was unable to obtain property insurance in the voluntary insurance market, an agent suggested that he contact a state pool created in the 1960s that makes property insurance available in riot-prone areas. The state pool the agent referred to is called a(n) […]
Date: September 19th, 2020
