Posted: January 2nd, 2017
Question 1.1.Which of the following capital budgeting techniques ignores the time value of money? (Points : 2.5) payback period approach net present value internal rate of return profitability index Question 2.2. The ________ is the rate of return that a firm must earn on its investments in order to maintain the market value of its stock. (Points : 2.5) yield to maturity cost of capital internal rate of return modified internal rate of return Question 3.3. The cost of common stock equity is ________. (Points : 2.5) the cost of the guaranteed stated dividend expected by the stockholders the rate at which investors discount the expected dividends of the firm to determine its share value the after-tax cost of the interest obligations the historical cost of floating the stock issue Question 4.4. A firm has an average age of inventory of 90 days, an average collection period of 40 days, and an average payment period of 30 days. The firm’s operating cycle is ________ days. (Points : 2.5) 110 130 120 70 Question 5.5. Which of the following is true of current assets? (Points : 2.5) The time of conversion of current assets to more liquid form is relatively unpredictable. They are used to fund long-term operations and pay long-term expenses. They are more profitable because they add more value to the product than that provided by fixed assets. They are sources of short-term financing for a firm Question 6.6.At a firm’s quarterly dividend meeting held April 9, the directors declared a $0.50 per share cash dividend for the holders of record on Monday, May 1. The firm’s stock will sell ex dividends on ________.(Points : 2.5) April 28 May 5 April 29 April 27 Question 7.7. Generally, the order of cost, from the least expensive to the most expensive, for long-term capital of a corporation is ________. (Points : 2.5) new common stock, retained earnings, preferred stock, long-term debt common stock, preferred stock, long-term debt, short-term debt preferred stock, new common stocks, common stock, retained earnings long-term debt, preferred stock, retained earnings, new common stock
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