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Finance Multiple Choice Questions




Question;Marcus Corporation has a capital budget of $5 million and wants to maintain a capital structure of 40% debt and 60% equity. The company expects net income of 4 million. What is the expected dividend payout ratio if the company follows a residual dividend policy? 50% 40% 20% 25% none of the aboveMLC, Inc. stock sold for $75 per share prior to a 4 for 1 stock split. What is the expected post-split stock price, everything else held constant? $50.00 $37.50 $18.75 $71.00 none of the aboveA company's stock sells for $2.00 per share. The company wants to use a reverse split to get the price up to $22 per share. How many of the old shares must be given up for one new share to get to the $22 price? Assume this transaction has no effect on market value. 22.0 20.5 10.0 12.0 none of the aboveWhich of the following would be most likely to result in an increase in a firm's dividend payout ratio? Its access to the capital markets decreases. It has more high-return investment opportunities Its accounts receivable increase due to a change in its credit policy. It has fewer high-return investment opportunities. none of the aboveA company wants to raise $10 million in equity at an expected offering price of $20 per share. Its investment banker will receive $1.50 for each share sold and incur expenses of $1 million. How many shares must be sold for the company to receive $10 million. Round to the nearest whole number. 450,000 594,595 500,000 540,541 none of the aboveA company is planning an IPO of 10 million shares. Each share is expected to sell at $10 per share. The underwriters will charge an 8% spread and incur expenses of $500,000. How much will the company receive if all shares sell at the expected price? $91,450,000 $92,000,000 $100,000,000 $99,500,000 none of the aboveA company sold 10 million shares in an IPO at a price of $10 per share. The underwriters charged an 8% fee and incurred expenses of $500,000. Price per share at the end of the first day was $12.50. How much money was left on the table? $15.8 million $33 million $17 million $25 million none of the aboveWhich of the following is a good reason for a company to go public? The company has excess capital The company has a low debt ratio The company's founders want to diversify Costs of reporting will be low none of the above A large company with publicly traded stock plans to issue additional shares. This is called: a shelf registration A private placement a seasoned equity offering an employee stock option plan none of the above


Paper#48918 | Written in 18-Jul-2015

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