Objective type questions on capital structure

Assignment Help Finance Basics
Reference no: EM1317400

Objective type questions on cost of capital and capital structure

1.   The mixture of debt and equity which a firm uses to finance its operations is called:

  1. Working capital management.
  2. Financial depreciation.
  3. Agency cost analysis.
  4. Capital budgeting.
  5. Capital structure.

2.   The management of the firm's current assets and liabilities is called:

  1. Working capital management.
  2. Financial depreciation.
  3. Agency cost analysis.
  4. Capital budgeting.
  5. Capital structure.

3. Which one of the following means of management compensation is designed to help eliminate the agency problem?

  1. Providing cost of living adjustments
  2. Increasing health care benefits
  3. Stock options
  4. Providing annual raises
  5. Providing a corporate jet

4.   Which of the following assets would most likely be considered the least liquid?

  1. A share of common stock in Enbridge
  2. A bond issued by Corel
  3. A share of preferred stock in Sears Canada
  4. A Lethbridge, Alberta municipal bond
  5. A Canadian Treasury bill

5.   For which of the following balance sheet items will the book value and market value most likely be closest?

  1. Net fixed assets
  2. Common stock
  3. Accounts receivable
  4. Long-term debt
  5. Retained earnings

6.   If operating cash flow is negative, then __________________.

  1. the firm is bankrupt
  2. the firm can pay no dividends
  3. cash flow to bondholders must be negative
  4. cash flow to stockholders must be positive
  5. cash flow from assets may be positive

7.   Which of the following would usually be true?

  1. If a current asset account and a current liability account both increase by the same amount, there is a net use of funds.
  2. If net fixed assets decrease by the amount of depreciation for the year, there is a net use of funds.
  3. Changes in income and expense accounts do not affect sources and uses of funds.
  4. If a liability account increases and an asset account decreases by the same amount, there is a net source of funds.
  5. If the common stock outstanding increases there is a use of funds

8.   Problems with financial statement analysis include all of the following EXCEPT:

  1. Many firms are conglomerates whose combined operations don't fit any neat industry classification.
  2. The financial statements of firms outside US and Canada do not necessarily conform to GAAP, making it difficult to compare them to US and Canadian firms.
  3. Firms may use different accounting procedures for inventory, making it difficult to compare them using standard financial ratios.
  4. If two firms with seasonal operations end their fiscal years at different times, their financial statements may be difficult to compare.
  5. Financial statements have little value since they cannot be used to calculate a firm's tax liability.

9. Return on equity will increase if the _________________.

  1. profit margin decreases
  2. return on assets increases
  3. debt-equity ratio decreases
  4. accounts receivable turnover increases
  5. total asset turnover decreases

10.   A financial plan should contain ______________ which provide a model of the firm's asset structure for the years to come.

  1. pro forma sales forecasts
  2. pro forma income statements
  3. pro forma financial requirements
  4. pro forma balance sheets
  5. common-size balance sheets

Reference no: EM1317400

Previous Q& A

  Calculate the compound interest

Calculate the compound interest.

  Make a vertical analysis of income statement for two years

Make a vertical analysis of income statement for two years Using the data in these abbreviated income statements

  Objective type questions on accounts receivables

Objective type questions on accounts receivables and an annuity may be defined as and which allows the corporation to force an early maturity on a bond issue

  Transformations & asymptotes of functions

Transformations & asymptotes of functions.

  Significant correlation among attitudes for husbands - wives

Calculate the Pearson correlation for these data also determine whether there is a significant correlation among attitudes for husbands also wives.

  Explain accounts receivables

Explain Accounts receivables and No other asset build-up will be required to service the new accounts

  Basics of parabolas and plotting

Basics of parabolas and plotting.

  Describe accounts receivables

Describe Accounts Receivables and also needs to increase its level of inventory to support new sales and that inventory turnover is four times

  Calculate the value of pearson correlation

Calculate the value of Pearson correlation. Illustrate what information is provided by the numerical value of the Pearson correlation.

  Account receivables using decision making

Account receivables using decision making and what would be Collins's incremental after tax return on investment

Reviews

Write a Review

 

Similar Q& A

  Computation of financial and operating levarages

Computation of financial and operating and combined levarages and Fastron has 1 million shares of common stock outstanding

  Computation of target selling price and target cost

Computation of target selling price and target cost of manufacture and Should they make the Re-Rind and what would you say to them to reconcile the positions.

  Computation of arbitrage opportunity

Computation of arbitrage opportunity and how much would you make on the arbitrage

  Explain computation of value of shares

Explain computation of value of shares and what will happen to the expected return if investors suddenly become less conservative and more willing to bear risk

  Computation of the current yield on the bond

Computation of the current yield on the bond and yield to maturity and A bond has 10 years until maturity, a coupon rate of 8%. and sells for $1,100.

  Define preparation of the table to amortize the premium

Define Preparation of the table to amortize the premium using the effective interest method

  Computation of coefficient of variation

Computation of Coefficient of Variation and The data gathered relative to each of these alternatives are summarized

  Objective type questions on current assets and liabilities

Objective type questions on current assets and liabilities and Which of the following statements is CORRECT

  Computation of the weighted average cost of capital

Computation of the weighted average cost of capital and Jake's Sound Systems has 210,000 shares of common stock outstanding at a market price of $36 a share

  How would investors and management view eva and fcf?

How would investors and management view EVA and FCF? Try one that you are familiar with-you shop at their store, eat at their restaurants, or wear their clothes. On their Web site, try to find their annual financial report.

  Adjust the floatation costs - cost of capital

Cost of Capital - various approaches that can be used to adjust the floatation costs and What are two approaches that can be used to adjust for flotation costs?

  Calculation of portfolio return and variance

Calculation of portfolio return and variance and standard deviation Use the Solver function in Excel to suggest different combinations of equity that will either provide the same return for less risk

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd