Homework Answers
The LAST option is correct.
i.e. It lowers the chance of bankruptcy because dividends for stock are not required payments, but interest expenses for the bond are the required payment.
Explanation: Dividend payments are not mandatory in nature, the dividend is may not be paid for some years however interest on bonds is required to be paid mandatorily even though the company facing a cash shortage condition.
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An advantage of obtaining long-term funds by issuing additional stock, instead of issuing bonds is? Multiple Choice...
A common advantage of obtaining long-term funds by issuing bonds, rather than borrowing from the bank,...
A common advantage of obtaining long-term funds by issuing bonds, rather than borrowing from the bank, includes which of the following? Multiple Choice ts awarded Scored O Bonds involve less surrendering of ownership control Bonds usually have a lower interest rate Bonds are more likely to involve borrowing from a single lender Bond issue costs are usually lower than fees charged by the bank.
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MULTIPLE CHOICE QUESTIONS 1. The legal contract between the issuing corporation and the bondholders is called...
MULTIPLE CHOICE QUESTIONS 1. The legal contract between the issuing corporation and the bondholders is called the bond indenture A) True B) False 2.One of the similarities of bond and equity financing is that both dividends and equity distribution payments are tax deductible. C) True D) False 3. Interest on bonds is tax deductible. E) True >F) False 2. The relationship between the market rate of a bond and the rate of return on the borrowed funds affects the company's...
1. Which of the following variables does NOT affect the value of a stock option? The...
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Total Assets $7,082,500 Total Liabilities 1,700,000 Common Stock 1,250,000 Additional Paid in Capital 2,097,500 Donated Capital 90,000 Ret. Earnings 1/1/Year4 1,650,000 Net Sales 6,250,000 Cost of Sales 3,750,000 Selling & Adm Expenses 1,212,500 Interest Expense 122,500 gain on sale of LT Investments 130,000 Income Tax Expense 300,000 Loss on Disposition of Plant Assets 225,000 Loss due to Earthquake Damage 475,000 Pucket Corp. is in the process of preparing its financial statements for the year ended December 31, Year4. Before closing...
MULTIPLE CHOICE: 1. What is the long-run objective of financial management? A. Maximize earnings per share B. Maximize...
MULTIPLE CHOICE: 1. What is the long-run objective of financial management? A. Maximize earnings per share B. Maximize the value of the firm's common stock C. Maximize return on investment D. Maximize market share 2. Which of the following statement (in general) is correct? A. A low receivables turnover is desirable B. The lower the total debt-to-equity ratio, the lower the financial risk for a firm C. An increase in net profit margin with no change in sales or assets means a weaker ROI...
help pls Questions 21-27 are based on the following information. CAPM and stock valuation. Your aunt, Beth, plan...
help pls
Questions 21-27 are based on the following information. CAPM and stock valuation. Your aunt, Beth, plans to invest in the common stock of Smart-investment Corporation Knowing that you are studying finance, she asks for your suggestion. You calculation shows that yield on Treasury securities is 6%. You know that the S&P 500 Index's expected annual return is 14% Your coonometric model tells you that beta of this company's stock is 1.25. Aunt Beth tells you that this company...
It is based on the multiple-choice question pasted below. Use the current 21 percent tax rate....
It is based on the multiple-choice question pasted below. Use the current 21 percent tax rate. (28) in the current year, Acom, Inc., had the following items of income and expense! Sales $500,000 Cost of sales 250,000 Dividends received 25,000 The dividends were received from a corporation of which Acom owns 30%. In Acom's current yoar income tax rotum, what amount should be reported as income before special deductions? A. $525.000 B. $508,750 C. $275,000 D. $250.000 The correct answer...
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A common advantage of obtaining long-term funds by issuing bonds, rather than borrowing from the bank, includes which of the following? Multiple Choice ts awarded Scored O Bonds involve less surrendering of ownership control Bonds usually have a lower interest rate Bonds are more likely to involve borrowing from a single lender Bond issue costs are usually lower than fees charged by the bank.
Retained Earnings normally has an account balance that: Multiple Choice Has a normal debit balance. Decreases stockholders' equity Is equal to the balance in cash. Increases stockholders' equity Next Prev 29 of 30 Which of the following is a reason that a corporation would prefer to issue stock instead of bonds? Multiple Choice Dividend payments can be deducted for income tax purposes but interest payments cannot O 2) Expansion is accomplished without surrendering ownership control. The risk of going bankrupt...
MULTIPLE CHOICE QUESTIONS 1. The legal contract between the issuing corporation and the bondholders is called the bond indenture A) True B) False 2.One of the similarities of bond and equity financing is that both dividends and equity distribution payments are tax deductible. C) True D) False 3. Interest on bonds is tax deductible. E) True >F) False 2. The relationship between the market rate of a bond and the rate of return on the borrowed funds affects the company's...
help pls
Questions 21-27 are based on the following information. CAPM and stock valuation. Your aunt, Beth, plans to invest in the common stock of Smart-investment Corporation Knowing that you are studying finance, she asks for your suggestion. You calculation shows that yield on Treasury securities is 6%. You know that the S&P 500 Index's expected annual return is 14% Your coonometric model tells you that beta of this company's stock is 1.25. Aunt Beth tells you that this company...
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