QUESTION 3 . One source of potential conflict between bond and stockholders is t

Question

QUESTION 3 . One source of potential conflict between bond and stockholders is the amount of liquidity the company should maintain. True False 2 points

QUESTION 4 . The prospectus for stock and a bonds covenant agreement are legal documents which describe certain parameters or obligations of the company to holders. True False 2 points

QUESTION 5. Financial managers can attempt to manipulate the per share value of their company by buying back shares of their own firms stock. True False 2 points

QUESTION 6. It was recommended to have a consistent and upward moving dividend policy if the firm is in the maturity stage of operations. True False 2 points

QUESTION 7. The Y axis of the IOS chart should cumulatively add capital. True False 2 points

QUESTION 8. A sunk cost has no impact on evaluation of a capital project. True False 2 points

QUESTION 9. When using the NPV rule to calculate the value of the potential capital investment, the WACC is used to calculate the time value of money. True False 2 points

QUESTION 10. The sale of a manufacturing facility is part of the operating activities portion of the three-part cash flow statement. True False

Explanation / Answer

QUESTION 3 . One source of potential conflict between bond and stockholders is the amount of liquidity the company should maintain. ---- True

QUESTION 4 . The prospectus for stock and a bonds covenant agreement are legal documents which describe certain parameters or obligations of the company to holders.-- False

QUESTION 5. Financial managers can attempt to manipulate the per share value of their company by buying back shares of their own firms stock. ---- False

QUESTION 6. It was recommended to have a consistent and upward moving dividend policy if the firm is in the maturity stage of operations.------True

QUESTION 7. The Y axis of the IOS chart should cumulatively add capital. True False 2 points

QUESTION 8. A sunk cost has no impact on evaluation of a capital project.------ True

QUESTION 9. When using the NPV rule to calculate the value of the potential capital investment, the WACC is used to calculate the time value of money-----. True

QUESTION 10. The sale of a manufacturing facility is part of the operating activities portion of the three-part cash flow statement. True False

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