If suppliers give firms 0% financing as trade credit, then firm value will be Group of...
If suppliers give firms 0% financing as trade credit, then firm value will be
Group of answer choices
a) the same as project value according to M&M proposition
b) less than project value because trade credit if unfair for firms
c) higher than project value because the trade credit causes a positive financial value
d) irrelevant to project values because firms take on as many trade credits as they want
Homework Answers
If suppliers give firms 0% financing as trade credit, then firm value will be
b) less than project value because trade credit is unfair for firms
Add Answer to:
If suppliers give firms 0% financing as trade credit, then firm
value will be
Group of...
Drop-down options: (accruals, trade credit, commercial paper, bank loans) 12. Sources of short-term financing Short-term credit,...
Drop-down options: (accruals, trade credit, commercial paper,
bank loans)
12. Sources of short-term financing Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs...
12. Sources of short-term financing Aa Aa Short-term credit, or short-term financing, is any liability that...
12. Sources of short-term financing Aa Aa Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs of the various sources of financing as...
20. Conflicts of interest between stockholders and bondholders are known as: 1. dealer costs. 2. trustee...
20. Conflicts of interest between stockholders and bondholders are known as: 1. dealer costs. 2. trustee costs. 3. agency costs. 4. underwriting costs. 5. financial distress costs. 21. MM's proposition II states that the: 1. greater the proportion of equity, the higher the expected return on debt. 2. firm's capital structure is irrelevant to value determination. 3. expected return on assets decreases as expected return on debt decreases. 4. expected return on equity increases as financial leverage increases. 22. One...
Financial ratios are useful because they give us ways to make meaningful comparisons of a firm's...
Financial ratios are useful because they give us ways to make meaningful comparisons of a firm's financial data _________. Group of answer choices with other similar firms within the same geographic region. all of the above. to other firms within the same market. across time. Flag this Question Question 32 pts A company with callable bonds might buy back the bonds (call the bonds) from investors if prevailing interest rates decline. This is because the company could then re-issue the...
Only say choice 8. In order to maximize firm value, management should invest in new assets...
Only say choice
8. In order to maximize firm value, management should invest in new assets when the internal rate of retum a. greater or equal to the firm's marginal cost of capital. b. greater than the cost of debt financing. c. less than or equal to the accounting rate of return. 9. The cost of capital is: a. the opportunity cost of using funds to invest in new projects. b. the rate of return the firm must ean on...
Question No: 1 The overall (weighted average) cost of capital is composed of a weighted average of : a)The cost of common equity and the cost of debt b)The cost of common equity and the cost of preferred stock c)The cost of preferred stock and the cost o
Question No: 1The overall (weighted average) cost of capital is composed of a weighted average of :a)The cost of common equity and the cost of debtb)The cost of common equity and the cost of preferred stockc)The cost of preferred stock and the cost of debtd)The cost of common equity, the cost of preferred stock, and the cost of debtQuestion No: 2Which of the following is a characteristic of preferred stock?a)These stocks have not stated liquidating valueb)Dividends on these stocks can...
When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net...
When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net income, when evaluating projects. To determine the incremental cash flows associated with a capital project, an analyst should include all of the following except: O Changes in net working capital associated with the project The project's financing costs The project's depreciation expense The project's fixed-asset expenditures Indirect cash flows often affect a firm's capital budgeting decisions. However, some of these indirect cash flows are...
can you please give feed back to this.. like add something or give a comment about...
can you please give feed back to this.. like add something or give a comment about the following posts. 1) Profit Margin = NetincomeSales Profit margin is very useful in analyzing the financial health of the firm because it indicates how much money is generated per every dollar in sales. A higher profit margin means there are low expense ratios relative to sales. In other words, it tells us how a company uses its income. When a company has a...
Your car dealer has a 0% financing promotion. He’s willing to give you an additional $500...
Your car dealer has a 0% financing promotion. He’s willing to give you an additional $500 discount off the list price if you finance the car over 36 months instead of 48 months. Which key principle in finance does this illustrate? a. Higher risk requires higher return b. Time value of money c. Cash is king d. Leverage increases financial risk Conflicts of interest in financial markets are unethical because They create perception of unfairness and sap investor confidence in...
Question 11 pts An annuity is best defined as: Group of answer choices a series of...
Question 11 pts An annuity is best defined as: Group of answer choices a series of payments for a specified period of time any series of payments a series of equal payments occurring at equal time intervals for a specified number of periods a series of equal payments for a specified number of years Flag this Question Question 21 pts A perpetuity can be described as: Group of answer choices an annuity that goes on forever an annuity that lasts...
Drop-down options: (accruals, trade credit, commercial paper,
bank loans)
12. Sources of short-term financing Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs...
12. Sources of short-term financing Aa Aa Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs of the various sources of financing as...
Only say choice
8. In order to maximize firm value, management should invest in new assets when the internal rate of retum a. greater or equal to the firm's marginal cost of capital. b. greater than the cost of debt financing. c. less than or equal to the accounting rate of return. 9. The cost of capital is: a. the opportunity cost of using funds to invest in new projects. b. the rate of return the firm must ean on...
When firms make capital budgeting decisions, they should concern themselves with incremental cash flows, not net income, when evaluating projects. To determine the incremental cash flows associated with a capital project, an analyst should include all of the following except: O Changes in net working capital associated with the project The project's financing costs The project's depreciation expense The project's fixed-asset expenditures Indirect cash flows often affect a firm's capital budgeting decisions. However, some of these indirect cash flows are...
Most questions answered within 3 hours.
-
The random variable X is exponentially distributed, where X
represents the time it takes for a...
asked 3 minutes ago -
MATLAB
write a MATLAB function (1) output a third-order polynomial
function with the coefficients as the...
asked 10 minutes ago -
A z-score
communicates a raw score’s "relative standing"
under the normal curve in relation to:
asked 19 minutes ago -
An object is vibrating on a spring with the following equation
of motion:
?=(30 ??)cos((2?)/(160)?)
a)...
asked 18 minutes ago -
Vulcan Flyovers offers scenic overflights of Mount St. Helens,
the volcano in Washington State that explosively...
asked 21 minutes ago -
If organizations do not adapt fast enough and move incrementally
from the twentieth-century model to the...
asked 21 minutes ago -
A helium balloon with 2.5L of gas has a gauge pressure of 10,000
Pa. The balloon...
asked 26 minutes ago -
What is responsible for Jupiter's enormous magnetic field?
asked 41 minutes ago -
At the end of the year, a company offered to buy 5,000 units of
a product...
asked 42 minutes ago -
Implement C++ program for each of the following.
Let D = [-48, -14, -8, 0, 1,...
asked 1 hour ago -
Consider a labor market in which LD = 400 – 4W and LS = 250 +...
asked 1 hour ago -
Let’s say you are teaching a typically-developing young child
how to eat with a spoon. Describe...
asked 1 hour ago