A “Dutch auction” was used by Google to raise money in 2004. A Dutch auction involves A) hiring a Dutch firm to sell a company’s securities at auction. B) allowing investment banking firms to submit bids on how many shares they are willing to sell and at what price. C) allowing investors to submit bids […]
Date: September 19th, 2020
Which of the following statements about the federal flood insurance program is true? A) Under the write-your-own program, each insurer services the policies it writes. B) The regular portion of the program does not allow the purchase of higher amounts of coverage than are available under the emergency portion of the program. C) No coverage […]
Date: September 19th, 2020
Which of the following statements about title insurance is true? A) A premium must be paid annually to keep the policy in force. B) The policy term runs for 30 years or the length of the insured’s mortgage loan, whichever is shorter. C) The policy guarantees that the owner will keep possession of the property […]
Date: September 19th, 2020
A firm’s ending equity equals the firms beginning equity plus any change in retained earnings. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The basic purpose of FAIR plans is to provide A) property insurance to persons who cannot obtain it in normal markets. B) automobile insurance to persons who cannot obtain it in normal markets. C) health insurance to persons who cannot afford it in normal markets. D) workers compensation insurance to employers who do business in […]
Date: September 19th, 2020
Based on the information in Table 4-1, the acid-test ratio is A) 1.02. B) 1.71. C) 0.98. D) 1.67. ANSWER A
Date: September 19th, 2020
Assume that a firm’s earnings per share (EPS) are expected to be $1.35 next year and that analysts have determined that an appropriate forward-looking multiple is 20 times the projected earnings. What should the stock price be? A) $11.35 B) $20.00 C) $27.00 D) $28.75 ANSWER C Explanation: C) Price = EPS * […]
Date: September 19th, 2020
There is no legal distinction made between the assets of the business and the personal assets of any of the owners in the limited partnership. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Investment banking firms offer to facilitate the sale of securities to the public in a variety of ways. Which of the following methods guarantees the corporation with a pre-determined price for the securities? A) an underwriting B) a commission basis C) a competitive bid D) a best efforts basis ANSWER A
Date: September 19th, 2020
Which of the following goals of the firm is equivalent to the maximization of shareholder wealth? A) Profit maximization B) Risk minimization C) Maximization of the total market value of the firm’s common stock D) None of the above ANSWER C
Date: September 19th, 2020
