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Finance Few Multiple Choice Quiz




Question;Marcus Corporation has a capital budget of $5 million and wants to maintain a capital structureof 40% debt and 60% equity. The company expects net income of 4 million. What is theexpected dividend payout ratio if the company follows a residual dividend policy?50%40 %%none of the aboveA companys dividend policy decision should not be influenced by which of the following?Constraints imposed by the firm's bond indenture.The fact that much of the firm's equipment has been leased rather than purchasedThe firm's ability to accelerate investment projects.The firm's ability to delay investment projectsnone of the aboveA company's stock sells for $2.00 per share. The company wants to use a reverse split to getthe price up to $22 per share. How many of the old shares must be given up for one new shareto get to the $22 price? Assume this transaction has no effect on market value.22.020.510.012.0none of the aboveWhich of the following would be most likely to result in an increase in a firm's dividend payoutratio?Its access to the capital markets decreases.It has more high-return investment opportunitiesIts accounts receivable increase due to a change in its credit policy.It has fewer high-return investment opportunities.none of the aboveA company is planning an IPO of 10 million shares. Each share is expected to sell at $10 pershare. The underwriters will charge an 8% spread and incur expenses of $500,000. Howmuch will the company receive if all shares sell at the expected price?$91,450,000$92,000,000$100,000,000$99,500,000none of the aboveA company sold 10 million shares in an IPO at a price of $10 per share. The underwriterscharged an 8% fee and incurred expenses of $500,000. Price per share at the end of the firstday was $12.50. How much money was left on the table?$15.8 million$33 million$17 million$25 millionnone of the aboveWhich of the following is a good reason for a company to go public?The company has excess capitalThe company has a low debt ratioThe company's founders want to diversifyCosts of reporting will be lownone of the aboveA large company with publicly traded stock plans to issue additional shares. This is called:a shelf registrationA private placementa seasoned equity offeringan employee stock option plannone of the above


Paper#48350 | Written in 18-Jul-2015

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