Financial literacy

Which of the following statements best describes the optimal capital structure a

Which of the following statements best describes the optimal capital structure and why? a. The optimal capital structure is the mix of debt, equity, and preferred stock that maxim…

Which of the following statements best describes the optimal capital structure?

Which of the following statements best describes the optimal capital structure? a. The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the…

Which of the following statements best describes the optimal capital structure?

Which of the following statements best describes the optimal capital structure? Answer The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes…

Which of the following statements best describes the rules of cash flow analysis

Which of the following statements best describes the rules of cash flow analysis? Question 15 options: With reagard to the final result, add back depreciation method is different …

Which of the following statements best describes the sign (positive or negative)

Which of the following statements best describes the sign (positive or negative) on depreciation expense? The sign on depreciation is positive because depreciation lowers the tax …

Which of the following statements best describes what would be expected to happe

Which of the following statements best describes what would be expected to happen as you randomly add stocks to your portfolio? A. Adding more stocks to your portfolio reduces the…

Which of the following statements best describes what you should expect if you r

Which of the following statements best describes what you should expect if you randomly select stocks and add them to your portfolio? Answer Adding more such stocks will reduce th…

Which of the following statements best explains what it mean when a project has

Which of the following statements best explains what it mean when a project has an NPV of $0? a. When a project has an NPV of $0, the project is earning a profit of $0. A firm sho…

Which of the following statements best represents the “Agency Problem “ A the ag

Which of the following statements best represents the “Agency Problem “ A the agency problem results from the separation of management and the ownership of the company B the agenc…

Which of the following statements concerning (forecasting) risk analysis in capi

Which of the following statements concerning (forecasting) risk analysis in capital budgeting is/are incorrect? a. The simulation analysis is the best method to identify the varia…

Which of the following statements concerning acquisitions are correct? I. Being

Which of the following statements concerning acquisitions are correct? I. Being acquired by another firm is an effective method of replacing senior management. II. The net present…

Which of the following statements concerning advertising is false? a. With creat

Which of the following statements concerning advertising is false? a. With creativity and ingenuity, a small company can make its advertising voice heard above the clamor of its l…

Which of the following statements concerning automatic reinvestment of dividends

Which of the following statements concerning automatic reinvestment of dividends and capital gains is correct? I Reinvestment of capital gains is a taxable transaction and reduces…

Which of the following statements concerning capital structure theory is false?

Which of the following statements concerning capital structure theory is false? Under MM with corporate taxes, the value of the levered firm exceeds the value of the unlevered fir…

Which of the following statements concerning cash flow planning is correct? The

Which of the following statements concerning cash flow planning is correct? The goal is to maximize net cash flow. The goal should be to invest for the future, rather than maintai…

Which of the following statements concerning common stock and the investment ban

Which of the following statements concerning common stock and the investment banking process is NOT CORRECT? a. The preemptive right gives each existing common stockholder the rig…

Which of the following statements concerning common stock and the investment ban

Which of the following statements concerning common stock and the investment banking process is NOT CORRECT? The preemptive right gives each existing common stockholder the right …

Which of the following statements concerning dividend policy is true? A constant

Which of the following statements concerning dividend policy is true? A constant payout ratio policy enables stockholders to accurately predict future dividends. Since there is no…

Which of the following statements concerning financial risk is false? A. Generic

Which of the following statements concerning financial risk is false? A.  Generically, financial risk is related to the probability of a return that is less than expected. B. If t…

Which of the following statements concerning financial risk is false? Select one

Which of the following statements concerning financial risk is false? Select one: a. Generically, financial risk is related to the probability of a return that is less than expect…

Which of the following statements concerning historical investment risk and retu

Which of the following statements concerning historical investment risk and return is false? The geometric mean of the rates of return was always lower than the arithmetic mean of…

Which of the following statements concerning powers of invasion are correct? I A

Which of the following statements concerning powers of invasion are correct? I A five-and-five power may be added to a nonmarital trust without the trust assets being includible i…

Which of the following statements concerning preferred stock is most correct? 7)

Which of the following statements concerning preferred stock is most correct? 7) A) If a corporation issues 4% preferred stock with a par value of $100, the dividend will increase…

Which of the following statements concerning preferred stock is most correct? A)

Which of the following statements concerning preferred stock is most correct? A) If a corporation issues 4% preferred stock with a par value of $100, the dividend will increase by…

Which of the following statements concerning rabbi trusts is(are) correct? A rab

Which of the following statements concerning rabbi trusts is(are) correct? A rabbi trust is a trust established and sometimes funded by the employer that is subject to the claims …

Which of the following statements concerning risk management is NOT CORRECT? Ans

Which of the following statements concerning risk management is NOT CORRECT? Answer Risk management can reduce the volatility of cash flows, and this decreases the probability of …

Which of the following statements concerning stock repurchases is most correct?

Which of the following statements concerning stock repurchases is most correct? a. Increasingly companies are using stock repurchases to distribute cash to their shareholders, but…

Which of the following statements concerning stock valuation is most correct? a.

Which of the following statements concerning stock valuation is most correct? a..The free cash flow method will result in a higher valuation that the dividend valuation method, be…

Which of the following statements concerning the MM extension with growth is NOT

Which of the following statements concerning the MM extension with growth is NOT CORRECT? (a) The tax shields should be discounted at the unlevered cost of equity. (b) The value o…

Which of the following statements concerning the MM extension with growth is NOT

Which of the following statements concerning the MM extension with growth is NOT CORRECT? (a) The tax shields should be discounted at the unlevered cost of equity. (b) The value o…

Which of the following statements concerning the cash budget is CORRECT? Answer

Which of the following statements concerning the cash budget is CORRECT? Answer -Depreciation expense is not explicitly included, but depreciation's effects are reflected in the e…

Which of the following statements concerning the cash budget is CORRECT? Answers

Which of the following statements concerning the cash budget is CORRECT? Answers Depreciation expense is not explicitly included, but depreciation's effects are reflected in the e…

Which of the following statements concerning the cash budget is CORRECT? a. Cash

Which of the following statements concerning the cash budget is CORRECT? a. Cash budgets do not include financial items such as interest and dividend payments. b. Depreciation exp…

Which of the following statements concerning the consequences of conduct inconsi

Which of the following statements concerning the consequences of conduct inconsistent with the CFP Board's Financial Planning Practice Standards is correct? Answers:       A. The …

Which of the following statements concerning the effective annual rate are corre

Which of the following statements concerning the effective annual rate are correct? I. When making financial decisions, you should compare annual percentage rates rather than effe…

Which of the following statements concerning the effective annual rate are corre

Which of the following statements concerning the effective annual rate are correct? I. A quoted rate of 4.5% compounded semiannually has a lower effective annual rate that a quote…

Which of the following statements concerning the estate tax treatment of assets

Which of the following statements concerning the estate tax treatment of assets held in a custodial account under either an UGMA or an UTMA is (are) correct?                     I…

Which of the following statements concerning the valuation of firms using the me

Which of the following statements concerning the valuation of firms using the method of comparables is FALSE? A. If two different firms generate identical cash flows, the Law of O…

Which of the following statements concerning the valuation of firms using the me

Which of the following statements concerning the valuation of firms using the method of comparables is FALSE? A If two different firms generate identical cash flows, the Law of On…

Which of the following statements concerning the valuation of life insurance pol

Which of the following statements concerning the valuation of life insurance policies for federal gift tax purposes is (are) correct?                                   I       If …

Which of the following statements concerning the weighted average cost of capita

Which of the following statements concerning the weighted average cost of capital (WACC) is/are correct? O a. The WACC is computed on the after-tax basis and with book value infor…

Which of the following statements holds true for a consolidated financial statem

Which of the following statements holds true for a consolidated financial statement? A.It is a part of a nation's balance of payments that includes purchases and sales of assets, …

Which of the following statements holds true for a spot exchange rate? A.It refe

Which of the following statements holds true for a spot exchange rate? A.It refers to the weighted average of a basket of foreign currencies. B.It refers to the rate at which two …

Which of the following statements holds true for debt financing? A.It refers to

Which of the following statements holds true for debt financing? A.It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into n…

Which of the following statements is (are) correct? A.If a market is weak-form e

Which of the following statements is (are) correct? A.If a market is weak-form efficient, it is also semi-strong-form and strong-form efficient. B.If a market is semi-strong-form …

Which of the following statements is (are) true? (I) Managers should not focus o

Which of the following statements is (are) true? (I) Managers should not focus on maximizing stock value because doing so will lead to an overemphasis on short term earnings at th…

Which of the following statements is CORRECT 1. A $1,000 bond with $100 annual i

Which of the following statements is CORRECT 1. A $1,000 bond with $100 annual interest payments that has 5 years to maturity and is not expected to default would sell at a discou…

Which of the following statements is CORRECT, assuming positive interest rates a

Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? Answer The present value of a 5-year, $250 annuity due will be lo…

Which of the following statements is CORRECT, assuming positive interest rates a

Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? The present value of a 5-year, $250 annuity due will be lower tha…

Which of the following statements is CORRECT, assuming stocks are in equilibrium

Which of the following statements is CORRECT, assuming stocks are in equilibrium? a. Assume that the required return on a given stock is 13%. If the stock's dividend is growing at…