The more debt a company uses to finance its assets, the lower will be its operating income due to higher interest expense. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
If two companies have the same revenues and operating expenses, their net incomes will still be different if one company finances its assets with more debt and the other company with more equity. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The root cause of agency problems is conflicts of interest. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Investors will be indifferent between two investments if both investments have the same expected return. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Individuals renting out rooms in their home for overnight stays, individuals jointly owing a car with other owners, and individuals who give rides to people who call or text them are creating “new” liability exposures for insurers. The social change that creates these new liability exposures is called A) the millennial generation. B) the baby […]
Date: September 19th, 2020
Common-sized income statements are used to compare companies that have the same amount of revenues. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
When making financial decisions, managers should always look at marginal, or incremental cash flows. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Flotation costs are typically greater in the secondary market than in the primary market. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Unmanned aircraft systems are gaining in popularity. These systems are creating new liability exposures. Unmanned aircraft systems are also known as A) rockets. B) hovercraft. C) ultralights. D) drones. ANSWER Answer: D
Date: September 19th, 2020
If the stock market is efficient, then investors do not need to read the Wall Street Journal or research companies before they select which stocks to buy because market prices already reflect all publicly available information. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
