A negative cash flow to owners indicates that a firm has _____. Incurred net losses and...
- A negative cash flow to owners indicates that a firm has _____.
- Incurred net losses and faces financial distress.
- Borrowed more money.
- Reduced the amount of debt.
- Sold additional shares of stock.
- Issued dividends while maintaining a constant number of outstanding shares of stock.
- A negative cash flow to creditors indicates that a firm has ____.
- Incurred net losses and faces financial distress.
- Borrowed more money.
- Reduced the amount of debt.
- Sold additional shares of stock.
- Issued dividends while maintaining a constant number of outstanding shares of stock.
Homework Answers
Please provide rating..
answer 1) correct answer is option > d. Sold additional shares of stock.
When company sold additional stock cash flow to owner will be negative
Answer 2) Correct answer is option > b. Borrowed more money.
When company borrow additional money cash flow to creditor will be negative.
Add Answer to:
A negative cash flow to owners indicates that a firm has
_____.
Incurred net losses and...
1. Cash flow to creditors must be negative when: a. net new borrowings exceed the amount...
1. Cash flow to creditors must be negative when: a. net new borrowings exceed the amount of interests paid b. the amount of dividends paid exceeds the net new borrowings. c. dividends payment exceed the interests payments. d. both the cash flow from assets and the cash flow to shareholders are negative. 2. The greater the level of debt incurred by a firm means: a. the greater the number of shares of common stock issued The higher the financial leverage...
UCCICase WC Capital Spung 22. Which one of the following must be true if a firm...
UCCICase WC Capital Spung 22. Which one of the following must be true if a firm had a negative cash flow from assets? A. The firm borrowed money. The firm acquired new fixed assets. The firm had a net loss for the period. The firm utilized outside funding. Newly issued shares of stock were sold. UOTuluded in cash flow from assets?
Treetop Corp. has a net loss (i.e., negative net income) of $3,400,000 for 2020. At January...
Treetop Corp. has a net loss (i.e., negative net income) of $3,400,000 for 2020. At January 1, 2020, Treetop had 2,500,000 shares of common stock outstanding. Treetop issued an additional 150,000 shares on April 1, and 80,000 more on July 1. On October 1, Treetop issued $5,500,000 of 4% convertible bonds at a premium of $110,000. Each $1,000 bond is convertible into 10 shares of common stock. No bonds have yet been converted. The number of shares to be used...
If the free cash flow of a firm is $103, net interest received is $69, dividends...
If the free cash flow of a firm is $103, net interest received is $69, dividends are $80, and the financial obligations of the firm are zero. In this case, the firm’s treasurer will buy debt securities to the value of:
RAD Co.’s most recent free cash flow was $1,000,000. The firm is expected to grow free...
RAD Co.’s most recent free cash flow was $1,000,000. The firm is expected to grow free cash flow at a constant rate of 3% per year forever. RAD Co. has $2,000,000 of debt, $800,000 of preferred stock, and 100,000 shares outstanding. The Weighted Average Cost of Capital is 7%. Compute firm value and today’s stock price.
A firm in mine industry generates risky cash flows with an expected value of $ 750,...
A firm in mine industry generates risky cash flows with an expected value of $ 750, 000 per year (perpetuity). Using direct tracking method of valuation, the CFO of the firm has found that in order to replicate the cash flows, the amount of money invested in the market portfolio (i.e., the term b) needs to be equal to the amount of money invested in the risk-free asset (i.e., the term a). The financial market is mean-variance efficient, the safe...
5. Employee stock ownership plans (ESOPs) Aa Aa Why would a firm be willing to establish an emplo...
Please answer the following. If
correct, I will make sure to thumbs up. Thank you!
5. Employee stock ownership plans (ESOPs) Aa Aa Why would a firm be willing to establish an employee stock ownership plan (ESOP)? Check all that apply. Cash dividends paid on ESOP stock are tax deductible if the dividends are used to repay the loan that established the ESOP. Employers are not required to match Social Security and Medicare taxes withheld from employees' paychecks when the...
5. Employee stock ownership plans (ESOPs) Aa Aa E Why would a firm be willing to...
5. Employee stock ownership plans (ESOPs) Aa Aa E Why would a firm be willing to establish an employee stock ownership plan (ESOP)? Check all that apply. O Cash dividends paid on ESOP stock are tax deductible if the dividends are used to repay the loan that established the ESOP. Employers are not required to match Social Security and Medicare taxes withheld from employees' paychecks when the employees are part of an ESOP. It is common for financial institutions to...
Preparing the Cash Flow from Financing Activities Section Gomez Corp. reported the following items for the...
Preparing the Cash Flow from Financing Activities Section Gomez Corp. reported the following items for the year ended December 31, 2020. Item Dec 31, 2020 Purchased an investment in debt securities (long-term) for cash $ 30,000 Sold equipment for cash, previously used in operations 25,000 Paid cash for dividends 10,000 Issued common stock for cash 100,000 Retired a 10-year bond payable by repaying the face value at maturity 80,000 Sold investment in equity securities (held for one-year) 11,000 Borrowed cash...
OCF=operating cash flow NCS-net capital spending NWC= net working capital CFS=cash flow to shareholders CFC=cash flow...
OCF=operating cash flow
NCS-net capital spending
NWC= net working capital
CFS=cash flow to shareholders
CFC=cash flow to creditors
FCF=free cash flow
1. A firm has the financial information shown below. The average tax rate is 30%. The plowback ratio is 50%. Calculate OCF, NCS, change in NWC, CFS, CFC, and FCF. Income Statement 2019 Revenues $20,000 Cost of Goods Sold $10.000 Other operating expenses $1,000 Depreciation expense $3.000 EBIT $6,000 Interest Expense $3,200 Taxable income $2.800 Taxes $840 Net income...
1. Cash flow to creditors must be negative when: a. net new borrowings exceed the amount of interests paid b. the amount of dividends paid exceeds the net new borrowings. c. dividends payment exceed the interests payments. d. both the cash flow from assets and the cash flow to shareholders are negative. 2. The greater the level of debt incurred by a firm means: a. the greater the number of shares of common stock issued The higher the financial leverage...
UCCICase WC Capital Spung 22. Which one of the following must be true if a firm had a negative cash flow from assets? A. The firm borrowed money. The firm acquired new fixed assets. The firm had a net loss for the period. The firm utilized outside funding. Newly issued shares of stock were sold. UOTuluded in cash flow from assets?
Please answer the following. If
correct, I will make sure to thumbs up. Thank you!
5. Employee stock ownership plans (ESOPs) Aa Aa Why would a firm be willing to establish an employee stock ownership plan (ESOP)? Check all that apply. Cash dividends paid on ESOP stock are tax deductible if the dividends are used to repay the loan that established the ESOP. Employers are not required to match Social Security and Medicare taxes withheld from employees' paychecks when the...
5. Employee stock ownership plans (ESOPs) Aa Aa E Why would a firm be willing to establish an employee stock ownership plan (ESOP)? Check all that apply. O Cash dividends paid on ESOP stock are tax deductible if the dividends are used to repay the loan that established the ESOP. Employers are not required to match Social Security and Medicare taxes withheld from employees' paychecks when the employees are part of an ESOP. It is common for financial institutions to...
Preparing the Cash Flow from Financing Activities Section Gomez Corp. reported the following items for the year ended December 31, 2020. Item Dec 31, 2020 Purchased an investment in debt securities (long-term) for cash $ 30,000 Sold equipment for cash, previously used in operations 25,000 Paid cash for dividends 10,000 Issued common stock for cash 100,000 Retired a 10-year bond payable by repaying the face value at maturity 80,000 Sold investment in equity securities (held for one-year) 11,000 Borrowed cash...
OCF=operating cash flow
NCS-net capital spending
NWC= net working capital
CFS=cash flow to shareholders
CFC=cash flow to creditors
FCF=free cash flow
1. A firm has the financial information shown below. The average tax rate is 30%. The plowback ratio is 50%. Calculate OCF, NCS, change in NWC, CFS, CFC, and FCF. Income Statement 2019 Revenues $20,000 Cost of Goods Sold $10.000 Other operating expenses $1,000 Depreciation expense $3.000 EBIT $6,000 Interest Expense $3,200 Taxable income $2.800 Taxes $840 Net income...
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