Which of the following statements most likely relate to an effect of return of capital? Shareholders...
Which of the following statements most likely relate to an effect of return of capital?
Shareholders benefit directly
Shareholders experience an increase in ownership
There is an increase in the par value of equity
It is a mandatory with options event
Homework Answers
Shareholders benefit directly is most likely relate to an effect of return of capital
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Which of the following statements most likely relate to an
effect of return of capital?
Shareholders...
Which of the following statements is (are) most likely FALSE: I. If Total Assets = Shareholders...
Which of the following statements is (are) most likely FALSE: I. If Total Assets = Shareholders Equity, then FCFF = FCFE II. If Total Assets = Shareholders Equity, then WACC = Cost of Equity III. If Total Assets > Shareholders Equity, then WACC > Cost of Equity a) I b) II c) III d) I, II e) I, II, III
Which of the following statements regarding equity is false? Dividends declared reduce earned capital. Preferred shareholders...
Which of the following statements regarding equity is false? Dividends declared reduce earned capital. Preferred shareholders are paid a dividend every year. Par value represents the legal capital that must be retained when a stock is issued. Paid-in capital in excess of par value is an example of contributed capital.
1. Which of the following statements is least likely to be correct? A. The amount of...
1. Which of the following statements is least likely to be correct? A. The amount of capital at which the weighted average cost of capital would change is termed as a break point. B. The marginal cost of capital schedule is the weighted average cost of capital for different risk levels, hence it is upward sloping. C. Country risk premium can be incorporated into the cost of equity from CAPM by adding the country risk premium to the market risk...
A proponent of the efficient markets hypothesis would be most likely to agree with which of...
A proponent of the efficient markets hypothesis would be most likely to agree with which of the following statements? When a security has recently been experiencing high rates of return, it's likely to experience less-than-average rates of return in the future. After adjusting for things like transactions and information costs, stocks sell for a good approximation of their fundamental value. Over the long run, financial investment in small firms has been more profitable than in large firms. All of the...
Which of the following statements correctly relate to M&M Proposition I (firm capital structure and firm...
Which of the following statements correctly relate to M&M Proposition I (firm capital structure and firm value), with taxes? a)Firm value increase with firm leverage when debt ratio is low, and then decrease with firm leverage when debt ratio is too high b)The value of a firm unlevered is greater than the value levered c)There could be an arbitrage opportunity when two firms that are virtually identical except for their capital structure are selling in the market at different values....
Which of the following statements is correct? The internal rate of return (IRR) does not allow...
Which of the following statements is correct? The internal rate of return (IRR) does not allow you to determine whether mutually exclusive projects are acceptable. The net present value (NPV) is the only capital budgeting technique that allows you to determine which independent projects are acceptable. The net present value (NPV) technique provides an indication of the dollar benefit (on a present value basis) to the firm's shareholders of purchasing a capital budgeting project. A project's internal rate of return...
f contractionary monetary policy is used, then which of the following would be most likely to...
f contractionary monetary policy is used, then which of the following would be most likely to enhance the effect of the contractionary policy on aggregate demand? Interest rates would increase, leading to an exchange rate appreciation and a fall in net exports. Interest rates would decrease, leading to an exchange rate appreciation and a fall in net exports. Interest rates would decrease, leading to an exchange rate depreciation and a rise in net exports. Interest rates would increase, leading to...
Which of the following statements is false in a Modigliani-Miller world? A. Capital structure does not...
Which of the following statements is false in a Modigliani-Miller world? A. Capital structure does not affect the cost of capital B. Higher leverage increase the cost of equity C. Higher leverage does not affect the WACC D. Higher leverage does not affect the cost of equity Which of the following is not an advantage of having large shareholders? A. Better coordination in monitoring management B. Executives more likely to be dismissed when underperforming C. Less shareholders' interference in the...
What effect will each of the following most likely have on the supply of corn in a competitive market? State what happen...
What effect will each of the following most likely have on the supply of corn in a competitive market? State what happens to supply. Explain your reasoning in each case and relate it to a supply determinant. (a) the development of an improved corn seed (b) an increase in the price of soybeans which can also be planted on land used for growing corn (c) an increase in government payments for growing corn (d) an increase in the price of...
Acc 202 1. Which of the following statements about par value is true? Directly tied to...
Acc 202 1. Which of the following statements about par value is true? Directly tied to market value of stock Directly tied to issue price of stock Determines amount of dividends that will be paid on common stock Is a nominal, arbitrary amount applied to shares of stock; unrelated to actual stock value or price When recording for issuance of stock, all of the following accurately describe this process except: Different classes of stock are recorded in separate stock accounts...
f contractionary monetary policy is used, then which of the following would be most likely to enhance the effect of the contractionary policy on aggregate demand? Interest rates would increase, leading to an exchange rate appreciation and a fall in net exports. Interest rates would decrease, leading to an exchange rate appreciation and a fall in net exports. Interest rates would decrease, leading to an exchange rate depreciation and a rise in net exports. Interest rates would increase, leading to...
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