Which of the following statements is most CORRECT? a)One advantage of forward co

Question

Which of the following statements is most CORRECT?

a)One advantage of forward contracts is that they are default free.

b)Futures contracts generally trade on an organized exchange and are marked to market daily.

c)Goods are never delivered under forward contracts, but are almost always delivered under futures contracts.Lepage Co. has an expected D1 of $1.375, it's expected constant divided growth rate is 6%, and it's common stock currently sells for $22.50 per share. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of equity equity  from new common stock?

a)11.81%

b)12.43%

c)13.05%

d)13.71%

e)14.39%

Biemker Corporation has $500 million of total assets, it's basic earning power is 15%, and it currently has no debt in its capital structure. The CFO is contemplating a recapitalization where it will issue debt at a cost of 10% and use the proceeds to buy back shares of the company's  common stock, paying book value. If the compnay proceeds with the recapitalization, it's operating  income, total assets, and tax rate will remain unchanged. Which of the following is most likely to occur as a result of the recapilization?

a)The ROA would increase

b)The ROA would remain unchanged

c) The basic earning power ratio would decline

d) The basic earning power ratio would increase

e) The ROE would increase

Which of the following statements  is most CORRECT?

a)one advantage of forward contracts is that they are default free

b)futures contracts generally  trade on an organized exchange and are marked to market daily

c)Goods are never delivered under forward contracts, but are almost always delivered under future contracts.

d) Answers a & C

e) non of the answer about are correct

PS I have on hour to answer these questions

Explanation / Answer

b)Futures contracts generally trade on an organized exchange and are marked to market daily.

c.Cost of equity=[1.375/(22.5*(1-.5))]+6%=12.43%

b)The ROA would remain unchanged

b)futures contracts generally trade on an organized exchange and are marked to market daily

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