Financial literacy

Which of the following statements is false? Leverage can reduce the degree of ma

Which of the following statements is false?        Leverage can reduce the degree of managerial entrenchment because managers are more likely to be fired when a firm faces financi…

Which of the following statements is false? Maximization of owner value and soci

Which of the following statements is false? Maximization of owner value and societal benefits are not always Agency problems are not as pronounced in sole proprietorships. Each fo…

Which of the following statements is false? Overhead expenses are associated wit

Which of the following statements is false? Overhead expenses are associated with activities that are not directly attributable to a single business activity but instead affect ma…

Which of the following statements is false? Overhead expenses are associated wit

Which of the following statements is false? Overhead expenses are associated with activities that are not directly attributable to a single business activity but instead affect ma…

Which of the following statements is false? Real estate firms are likely to have

Which of the following statements is false?        Real estate firms are likely to have low costs of financial distress, as much of their value derives from assets that can be sol…

Which of the following statements is false? Select all that apply: The optimal c

Which of the following statements is false? Select all that apply: The optimal credit policy minimizes the total cost of granting credit Firms should avoid offering credit at all …

Which of the following statements is false? Select the correct answer. a) the pe

Which of the following statements is false? Select the correct answer. a) the percentage method can be used to calculate federal and state income tax withholdings instead of the w…

Which of the following statements is false? The market portfolio contains more o

Which of the following statements is false?        The market portfolio contains more of the smallest stocks and less of the larger stocks.        For the market portfolio, the in…

Which of the following statements is false? The value of an otherwise identical

Which of the following statements is false? The value of an otherwise identical call option is higher if the strike price the holder must pay to buy the stock is higher. Because a…

Which of the following statements is false? When computing the incremental earni

Which of the following statements is false? When computing the incremental earnings of an investment decision, we should include all changes between the form's earnings with the p…

Which of the following statements is false? a. If the financial markets are effi

Which of the following statements is false? a. If the financial markets are efficient, then an unexpected negative announcement about a firm s earnings will cause the price of tha…

Which of the following statements is false? a. If the financial markets are effi

Which of the following statements is false? a. If the financial markets are efficient, then an unexpected negative announcement about a firm s earnings will cause the price of tha…

Which of the following statements is false? a. Over time, the market value of as

Which of the following statements is false? a. Over time, the market value of assets will almost always diverge from their historical book value. b. Book value is an accounting su…

Which of the following statements is false? a. Sarah Salesclerk sells word proce

Which of the following statements is false? a. Sarah Salesclerk sells word processors on commission at Marlin's Department Store. She likes to sell the deluxe model because she ea…

Which of the following statements is false? the stock and bond markets are very

Which of the following statements is false? the stock and bond markets are very efficient. In real life, when an individual expects the economy to expand, he should hold no nomina…

Which of the following statements is false?(When DB and switching DB are compare

Which of the following statements is false?(When DB and switching DB are compared, assume that they have the same n and alpha parameters. Assume that SL depreciation has zero salv…

Which of the following statements is incorrect regarding cash flows determinatio

Which of the following statements is incorrect regarding cash flows determination for a typical capital budgeting process? A. All cash flows must be after-tax figures. B. Infusion…

Which of the following statements is incorrect with respect to the Financial Ser

Which of the following statements is incorrect with respect to the Financial Services Modernization Act of 1999? Question 23 options: It complemented the Glass-Steagall Act. It en…

Which of the following statements is incorrect withrespect to creditors and equi

Which of the following statements is incorrect withrespect to creditors and equity investors? A. Both creditors and equity investors are concerned about securityprices. B. Equity …

Which of the following statements is incorrect? A life insurance policy allows t

Which of the following statements is incorrect? A life insurance policy allows the beneficiary to receive proceeds at some future date. An annuity is a financial contract written …

Which of the following statements is incorrect? a. If the coupon rate of a bond

Which of the following statements is incorrect? a. If the coupon rate of a bond s equal to the nvestor's required rate of return, the present value of the bond should be equal to …

Which of the following statements is most CORRECT with respect to the similariti

Which of the following statements is most CORRECT with respect to the similarities and differences between warrants and convertibles? Warrants have an option feature but convertib…

Which of the following statements is most CORRECT? ( please tell me why) Answer

Which of the following statements is most CORRECT? ( please tell me why) Answer A) If a company that produces military equipment merges with a company that manages a chain of mote…

Which of the following statements is most CORRECT? (a) Firms that use \"off bala

Which of the following statements is most CORRECT? (a) Firms that use "off balance sheet" financing, such as leasing, would show lower debt ratios if the effects of their leases w…

Which of the following statements is most CORRECT? Answer Tax considerations oft

Which of the following statements is most CORRECT? Answer Tax considerations often play a part in mergers. If one firm has excess cash, purchasing another firm exposes the purchas…

Which of the following statements is most CORRECT? Answer a.Leveraged buyouts (L

Which of the following statements is most CORRECT? Answer a.Leveraged buyouts (LBOs) occur when a firm issues equity and uses the proceeds to take a firm public. b.In a typical LB…

Which of the following statements is most CORRECT? If new debt is used to refund

Which of the following statements is most CORRECT? If new debt is used to refund old debt, the correct discount rate to use in the refunding analysis is the before-tax cost of new…

Which of the following statements is most CORRECT? Please do not guess!!! Answer

Which of the following statements is most CORRECT? Please do not guess!!! Answer The high value of the U.S. dollar relative to Japanese and European currencies in the 1980s, made …

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

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…

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

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…

Which of the following statements is most CORRECT? a. A defensive merger is one

Which of the following statements is most CORRECT?a. A defensive merger is one where the firm's managers decide to merge with another firm to avoid or lessen the possibility of be…

Which of the following statements is most CORRECT? a. Acquiring firms send a sig

Which of the following statements is most CORRECT? a. Acquiring firms send a signal that their stock is undervalued if they choose to use stock to pay for the acquisition. b. If a…

Which of the following statements is most CORRECT? a. If a company that produces

Which of the following statements is most CORRECT? a. If a company that produces military equipment merges with a company that manages a chain of motels, this is an example of a h…

Which of the following statements is most CORRECT? a. Managers who purchase othe

Which of the following statements is most CORRECT? a. Managers who purchase other firms often assert that the new combined firm will enjoy benefits from diversification, including…

Which of the following statements is most CORRECT? a. Research of U.S. firms sug

Which of the following statements is most CORRECT? a. Research of U.S. firms suggests that managers' personal motivations have had little, if any, impact on firms' decisions to me…

Which of the following statements is most CORRECT? a. Tax considerations often p

Which of the following statements is most CORRECT? a. Tax considerations often play a part in mergers. If one firm has excess cash, purchasing another firm exposes the purchasing …

Which of the following statements is most CORRECT? a. The goal of merger valuati

Which of the following statements is most CORRECT? a. The goal of merger valuation is to value the target firm's total capital at the target firm's weighted average cost of capita…

Which of the following statements is most CORRECT? a. The smaller the synergisti

Which of the following statements is most CORRECT? a. The smaller the synergistic benefits of a particular merger, the greater the scope for striking a bargain in negotiations, an…

Which of the following statements is most accurate regarding agency problems? Se

Which of the following statements is most accurate regarding agency problems? Select one: a. An agency problem likely occurs when there is a conflict of interest between owners an…

Which of the following statements is most correct and why? a. If beta doubles, t

Which of the following statements is most correct and why? a. If beta doubles, the required return doubles. b. If a stock has a negative beta, its required return is negative. c. …

Which of the following statements is most correct concerning a corporation\'s op

Which of the following statements is most correct concerning a corporation's optimal capital structure? A) The optimal capital structure maximizes the present value of the interes…

Which of the following statements is most correct concerning diversification and

Which of the following statements is most correct concerning diversification and risk? a. Risk-averse investors often select portfolios that include only companies from the same i…

Which of the following statements is most correct concerning diversification and

Which of the following statements is most correct concerning diversification and risk? a. Risk-averse investors often select portfolios that include only companies from the same i…

Which of the following statements is most correct concerning diversification and

Which of the following statements is most correct concerning diversification and risk? A. Asset allocation is important for pension funds but not for individual investors. B. Larg…

Which of the following statements is most correct concerning flotation costs? A)

Which of the following statements is most correct concerning flotation costs? A) Flotation cost are generally higher for bonds rather than stocks because the dollar amounts involv…

Which of the following statements is most correct. Choose one answer. a. The sto

Which of the following statements is most correct. Choose one answer. a. The stock valuation model, P0 = D1/(rs - g), can be used for firms which have negative growth rates. b. If…

Which of the following statements is most correct: a) One important difference b

Which of the following statements is most correct: a) One important difference between warrants and convertibles is that convertibles bring in additional funds when they are conve…

Which of the following statements is most correct? (Points : 1) Variable rate de

Which of the following statements is most correct? (Points : 1) Variable rate debt never should be used by healthcare organizations because it is too risky. Compared to fixed inte…

Which of the following statements is most correct? (Points : 6) A. If a stock\'s

Which of the following statements is most correct? (Points : 6) A. If a stock's beta increased but its growth rate remained the same, then the new equilibrium price of the stock w…

Which of the following statements is most correct? (Points : 6) A. Tests have sh

Which of the following statements is most correct? (Points : 6) A. Tests have shown that the betas of individual stocks are unstable over time, but that the betas of large portfol…