Which of the following is the least expensive capital for the firm? Bond capital Preferred Stock capital...
Which of the following is the least expensive capital for the firm?
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Bond capital |
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Preferred Stock capital |
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Common Stock capital |
What will happen to your yield when you pay more for an investment, holding all else constant?
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The yield will go down |
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The yield will go up |
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The yield could go up or down |
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The yield should not be affected |
Which of the following is a true statement?
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The cost of bond capital for the firm is not tax deductible |
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The cost of common stock capital for the firm is tax deductible |
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The cost of preferred stock capital for the firm is tax deductible |
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The cost of bond capital for the firm is tax deductible |
Which of the following is a true statement?
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IRR is the best cash flow evaluation method and Payback is the worst method |
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NPV is the best cash flow evaluation method and IRR is the worst method |
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NPV is the best cash flow evaluation method and Payback is the worst method |
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PI is the best cash flow evaluation method and IRR is the worst method |
The preferred stock dividend
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Increases as the growth rate of the firm increases |
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Is fixed |
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Could increase or decrease depending on the growth of the firm |
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Could increase or decrease depending on market interest rates |
Homework Answers
Q-1 Bond capital
Q-2 The yield will go down
Q-3 The cost of bond capital for the firm is tax deductible
Q-4 NPV is the best cash flow evaluation method and Payback is the worst method
Q-5 Could increase or decrease depending on market interest rates
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Which of the following is the least expensive capital for the firm? Bond capital Preferred Stock capital...
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