Financial literacy
81314 questions • Page 1413 / 1627
Which of the following statements is CORRECT? a. The board of directors is the h
Which of the following statements is CORRECT? a. The board of directors is the highest ranking body in a corporation, and the chairman of the board is the highest ranking individu…
Which of the following statements is CORRECT? a. The capital structure that maxi
Which of the following statements is CORRECT? a. The capital structure that maximizes the stock price is also the capital structure that minimizes the cost of equi…
Which of the following statements is CORRECT? a. The capital structure that maxi
Which of the following statements is CORRECT? a. The capital structure that maximizes the stock price is also the capital structure that maximizes earnings per share. b. The capit…
Which of the following statements is CORRECT? a. The component cost of preferred
Which of the following statements is CORRECT? a. The component cost of preferred stock is expressed as rp(1 T), because preferred stock dividends are treated as fixed charges, sim…
Which of the following statements is CORRECT? a. The corporate valuation model r
Which of the following statements is CORRECT? a. The corporate valuation model requires the assumption of a constant growth rate in all years. b. To implement the corporate valuat…
Which of the following statements is CORRECT? a. The higher the correlation betw
Which of the following statements is CORRECT? a. The higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio. b. Once a portfolio ha…
Which of the following statements is CORRECT? a. The income statement gives us a
Which of the following statements is CORRECT? a. The income statement gives us a picture of the firm's financial position at a point in time. b. The statement of cash flows tells …
Which of the following statements is CORRECT? a. The internal rate of return met
Which of the following statements is CORRECT? a. The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital…
Which of the following statements is CORRECT? a. The internal rate of return met
Which of the following statements is CORRECT? a. The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital…
Which of the following statements is CORRECT? a. The modified internal rate of r
Which of the following statements is CORRECT? a. The modified internal rate of return method (MIRR) is generally regarded by academics as being the best single method for evaluati…
Which of the following statements is CORRECT? a. The more conservative a firm\'s
Which of the following statements is CORRECT? a. The more conservative a firm's management is, the higher its debt ratio is likely to be. b. If a firm's fixed assets turnover rati…
Which of the following statements is CORRECT? a. The more conservative a firm\'s
Which of the following statements is CORRECT? a. The more conservative a firm's management is, the higher its debt ratio is likely to be. b. If a firm's fixed assets turnover rati…
Which of the following statements is CORRECT? a. The more conservative a firm\'s
Which of the following statements is CORRECT? a. The more conservative a firm's management is, the higher its debt ratio is likely to be. b. If a firm's fixed assets turnover rati…
Which of the following statements is CORRECT? a. The more conservative a firm\'s
Which of the following statements is CORRECT? a. The more conservative a firm's management is, the higher its debt ratio is likely to be. b. If a firm's fixed assets turnover rati…
Which of the following statements is CORRECT? a. The more conservative a firm\'s
Which of the following statements is CORRECT? a. The more conservative a firm's management is, the higher its debt ratio is likely to be. b. If a firm's fixed assets turnover rati…
Which of the following statements is CORRECT? a. The more depreciation a firm ha
Which of the following statements is CORRECT? a. The more depreciation a firm has in a given year, the higher its EPS, other things held constant. b. Typically, a firm's DP…
Which of the following statements is CORRECT? a. The optimal capital structure m
Which of the following statements is CORRECT? a. The optimal capital structure minimizes the cost of equity, which is a necessary condition for maximizing the stock price. b. As a…
Which of the following statements is CORRECT? a. The optimal capital structure s
Which of the following statements is CORRECT? a. The optimal capital structure simultaneously maximizes EPS and minimizes the WACC. b. The optimal capital structure minimizes the …
Which of the following statements is CORRECT? a. The optimal capital structure s
Which of the following statements is CORRECT? a. The optimal capital structure simultaneously maximizes EPS and minimizes the WACC. b. The optimal capital structure minimizes the …
Which of the following statements is CORRECT? a. The ratio of long-term debt to
Which of the following statements is CORRECT? a. The ratio of long-term debt to total capital is more likely to experience seasonal fluctuations than is either the DSO or the inve…
Which of the following statements is CORRECT? a. The regular payback ignores cas
Which of the following statements is CORRECT? a. The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem. b. One…
Which of the following statements is CORRECT? a. The statement of cash flows ref
Which of the following statements is CORRECT? a. The statement of cash flows reflects cash flows from continuing operations, but it does not reflect the effects of changes in work…
Which of the following statements is CORRECT? a. The total return on a bond duri
Which of the following statements is CORRECT? a. The total return on a bond during a given year is based only on the coupon interest payments received. b. The price of a discount …
Which of the following statements is CORRECT? a. The yield on a 3-year Treasury
Which of the following statements is CORRECT? a. The yield on a 3-year Treasury bond cannot exceed the yield on a 10-year Treasury bond. b. The yield on a 2-year corporate bond sh…
Which of the following statements is CORRECT? a. The yield on a 3-year Treasury
Which of the following statements is CORRECT? a. The yield on a 3-year Treasury bond cannot exceed the yield on a 10-year Treasury bond. b. The yield on a 2-year corporate bond sh…
Which of the following statements is CORRECT? a. The yield to maturity for a cou
Which of the following statements is CORRECT? a. The yield to maturity for a coupon bond that sells at a premium consists entirely of a positive capital gains yield; it has a zero…
Which of the following statements is CORRECT? a. There is a tax disadvantage to
Which of the following statements is CORRECT? a. There is a tax disadvantage to incorporation, and there is no way any corporation can escape this disadvantage, even if it is very…
Which of the following statements is CORRECT? a. There is an \"opportunity cost\
Which of the following statements is CORRECT? a. There is an "opportunity cost" associated with using reinvested earnings, hence they are not "free." b. The WACC as used in capita…
Which of the following statements is CORRECT? a. There is no reason to think tha
Which of the following statements is CORRECT? a. There is no reason to think that the slope of the yield curve would have any effect on the slope of the SML. b. If investors becom…
Which of the following statements is CORRECT? a. To find the MIRR, we discount t
Which of the following statements is CORRECT? a. To find the MIRR, we discount the TV at the IRR. b. When evaluating independent projects, the NPV and IRR methods often yield conf…
Which of the following statements is CORRECT? a. To find the MIRR, we discount t
Which of the following statements is CORRECT? a. To find the MIRR, we discount the TV at the IRR. b. The IRR method appeals to some managers because it gives an estimate of the ra…
Which of the following statements is CORRECT? a. To implement the corporate valu
Which of the following statements is CORRECT? a. To implement the corporate valuation model, we discount net operating profit after taxes (NOPAT) at the weighted average cost of c…
Which of the following statements is CORRECT? a. Two bonds have the same maturit
Which of the following statements is CORRECT? a. Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices…
Which of the following statements is CORRECT? a. Two firms with the same expecte
Which of the following statements is CORRECT? a. Two firms with the same expected dividend and growth rates must also have the same stock price. b. It is appropriate to u…
Which of the following statements is CORRECT? a. Under current laws and regulati
Which of the following statements is CORRECT? a. Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 5 years …
Which of the following statements is CORRECT? a. Under current laws and regulati
Which of the following statements is CORRECT? a. Under current laws and regulations, corporations must use straight-line depreciation for all assets whose lives are 3 years or…
Which of the following statements is CORRECT? a. Using some of the firm\'s cash
Which of the following statements is CORRECT? a. Using some of the firm's cash to reduce long-term debt is an example of "window dressing." b. Borrowing on a long-term basis and u…
Which of the following statements is CORRECT? a. When firms are deciding on the
Which of the following statements is CORRECT? a. When firms are deciding on the size of stock splits--say whether to declare a 2-for-1 split or a 3-for-1 split, it is best to decl…
Which of the following statements is CORRECT? a. You think that investor sentime
Which of the following statements is CORRECT? a. You think that investor sentiment is about to change, and investors are about to become more risk averse. This suggests that you s…
Which of the following statements is CORRECT? a.To implement the corporate valua
Which of the following statements is CORRECT? a.To implement the corporate valuation model, we discount projected free cash flows at the weighted average cost of capital. b. To im…
Which of the following statements is CORRECT? explain your answer..............
Which of the following statements is CORRECT? explain your answer.............. a. One disadvantage of dividend reinvestment plans is that they increase transactions costs for inv…
Which of the following statements is CORRECT? • If the maturity risk premium wer
Which of the following statements is CORRECT? • If the maturity risk premium were zero and interest rates were expected to decrease in the future, then the yield curve for U.S. Tr…
Which of the following statements is CORRECT?Answer A stock\'s beta is less rele
Which of the following statements is CORRECT?Answer A stock's beta is less relevant as a measure of risk to an investor with a well-diversified portfolio than to an investor who h…
Which of the following statements is Correct? A. If a firm has the highest price
Which of the following statements is Correct? A. If a firm has the highest price/earnings ratio of any firm in its industry, then, other things held constant, this suggests that t…
Which of the following statements is Correct? a. The slope of the SML is determi
Which of the following statements is Correct? a. The slope of the SML is determined by the value of beta b. The SML shows the relationship between companies' required returns and …
Which of the following statements is FALSE regarding profitable and unprofitable
Which of the following statements is FALSE regarding profitable and unprofitable growth? If the firm retains more earnings, it will bea able to pay out less of those earnings, whi…
Which of the following statements is FALSE? (more then 1 may be correct) The opp
Which of the following statements is FALSE? (more then 1 may be correct) The opportunity cost of capital is the return the investor forgoes when the investor takes on a new invest…
Which of the following statements is FALSE? A It is common practice to use valua
Which of the following statements is FALSE? A It is common practice to use valuation multiples based on a firm?s enterprise value. B. Using a valuation multiple based on comparabl…
Which of the following statements is FALSE? A common approximation is to assume
Which of the following statements is FALSE? A common approximation is to assume that in the long run, dividends will grow at a constant rate. There is a tremendous amount of uncer…
Which of the following statements is FALSE? A) Beta represents the amount by whi
Which of the following statements is FALSE? A) Beta represents the amount by which risks that affect the overall market are amplified for a given stock or investment. B) Beta is t…
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