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Which of the following are capital structure conce...




Which of the following are capital structure concerns? I. how to obtain short-term financing II. the company's financing mix III. the cost of funds IV. how and where to raise money (Points: 4) I and II I, II and III II, III and IV I, III and IV All of the above 2. (TCO 1) Market values reflect which of the following: (Points: 4) The amount someone is willing to pay today for an asset. The value of the asset based on generally-accepted accounting principles. The asset?s historical cost. A and B only None of the above 3. (TCO 1) Use the following tax table to answer this question: Riddell, Inc. earned $144,320 in taxable income for the year. How much tax does the company owe on this income? (Points: 4) $39,535 $49,069 $51,285 $56,285 $78,535 4. (TCO 3) Regional Bank offers you an APR of nine percent compounded quarterly, and Local Bank offers you an EAR of 9.15 percent for a new automobile loan. You should choose ______________ because its _______ is lower. (Points: 4) Regional Bank, APR Local Bank, EAR Regional Bank, EAR Local Bank, APR 5. (TCO 3) You deposited $5,000 in your bank account today. An increase in which of the following will increase the future value of your deposit, assuming that all interest is reinvested? Assume the interest rate is a positive value. Select all that apply: (Points: 4) interest rate initial amount of your deposit frequency of the interest payments length of the investment period 6. (TCO 3) Amy needs to save $20,000 in cash to buy a new car five years from today. She expects to earn 6.5 percent, compounded annually, on her savings. How much does she need to deposit today, if this is the only money she saves for this purpose? (Points: 4) $12,468.07 $12,502.14 $14,597.62 $17,044.32 $17,129.01 7. (TCO 3) Paper Pro needed a new store. The company spent $65,000 to refurbish an old shop and create the current facility. The firm borrowed 75 percent of the refurbishment cost at eight percent interest for 11 years. What is the amount of each monthly payment? (Points: 4) $91.05 $284.13 $556.50 $682.87 $731.60 8. (TCO 3) Amy borrowed $5,000 from her bank three years ago. The loan term is five years. Each year, Amy must repay the bank $1,000 plus the annual interest. Which type of loan does Amy have? (Points: 4) amortized blended discount interest-only pure discount complex 9. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 13 percent? Assume annual payments. (Points: 4) $1078 $1085 $927 $1000 10. (TCO 6) The market where one shareholder sells shares to another shareholder is called the _____ market. (Points: 4) primary main secondary principal dealer 11. (TCO 7) Which one of the following statements concerning financial leverage is correct? (Points: 4) Financial leverage increases profits and decreases losses. Financial leverage has no effect on a firm's return on equity. Financial leverage, refers to the use of common stock. Financial leverage magnifies both profits and losses. Increasing financial leverage will always increase the earnings per share. 12. (TCO 3) A 10-year bond pays 11 percent interest on a $1000 face value annually. If it currently sells for $1,195, what is its approximate yield to maturity? (Points: 4) 9.33% 7.94% 12.66% 8.10% 13. (TCO 8) Which of the following is true regarding bonds? (Points: 4) Bonds do not carry default risk. Bonds are sensitive to changes in the interest rates. Moody?s and Standard and Poor?s provide information regarding a bond?s interest rate risk. Municipal bonds are free of default risk. None of the above is true 14. (TCO 8) Two years ago, Maple Enterprises issued six percent, 20-year bonds and Temple Corp issued six percent, 10-year bonds. Since their time of issue, interest rates have increased. Which of the following statements is true of each firm's bond prices in the market, assuming they have equal risk? (Points: 4) Maple's decreased more than Temple's Temple's decreased more than Maple's Maple's increased more than Temple's They are both priced the same 15. (TCO 6) Star Industries has one bond issue outstanding. An indenture provision prohibits the firm from redeeming the bonds during the first two years. This provision is referred to as a _____ provision. (Points: 4) deferred call market liquidity debenture sinking fund


Paper#6953 | Written in 18-Jul-2015

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