The issuance of bonds to raise capital for a corporation: A) magnifies the retur

Question

The issuance of bonds to raise capital for a corporation:

A) magnifies the returns to the stockholders.

B) increases risk to the stockholders.

C) is a cheaper form of capital than the issuance of common stock.

D) all of the above.

Common stockholders are essentially:

A) creditors of the firm.

B) managers of the firm.

C) owners of the firm.

D) all of the above.

) Which of the following are typical consequences of good capital budgeting decisions?

A) The firm increases in value.

B) The firm gains knowledge and experience that may be useful in future decisions.

C) Good capital budgeting decisions help a company define its core competencies.

D) All of the above.

Which of the following factors is least important to capital budgeting decisions.?

A) The time value of money

B) The risk-return tradeoff

C) Net income based on accrual accounting principles

D) Cash flows directly resulting from the decision

Explanation / Answer

The issuance of bonds to raise capital for a corporation:

D) all of the above.

Common stockholders are essentially:

C) owners of the firm. As they own shares of the company

Which of the following are typical consequences of good capital budgeting decisions?

A) The firm increases in value.

Which of the following factors is least important to capital budgeting decisions.?

C) Net income based on accrual accounting principles. Accrual accounting may be window dressed to give a rosy picture of the company performance, however if the company financial is in a bad shape if it doesnot have adequate cashflows and capital, the firm's operations may collapse even if Net income based on accruals seems to be substantial.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.