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Finc600 week 8 practice quiz fin c600
- 1. FINC600 Week 8 Practice Quiz/FIN C600 Click Link Below To Buy: https://hwaid.com/shop/finc600-week-8-practice-quizfin-c600/ Contact Us: hwaidservices@gmail.com FINC600 Week 8 Practice Quiz Corporate Finance Week 8 Practice Quiz Question 1 of 25 4.0/ 4.0 Points Indirect costs ofbankruptcy are borne principallyby: A.Bondholders B.Stockholders C.Managers D.The federal government Question 2 of 25 4.0/ 4.0 Points Which of the following lists events in the chronological order from earliestto latest? A.Record date, declaration date, ex-dividend date B.Declaration date,record date, ex-dividend date C.Declaration date,ex-dividend date, record date D.None of the above Question 3 of 25 4.0/ 4.0 Points Dividends are decided by: I) The managers ofa firm II) The government III) The board of directors A.I only B.II only C.III only D.I and II only
- 2. Question 4 of 25 3.5/ 4.0 Points Discuss some examples ofthe conflicts of interestthat may arise between bondholders and stockholders when a firm is in financial distress. Question 5 of 25 4.0/ 4.0 Points The main advantage of debt financing for a firm is: I) no SEC registration is required for bond issue II) interestexpense of a firm is tax deductible III) unlevered firms have higher value than levered firms A.I only Question 6 of 25 4.0/ 4.0 Points Capital structure of the firm can be defined as: I) the firm’s debt-equityratio II) the firm’s mixof different securities used to finance assets III) the marketimperfection thatthe firm’s manager can exploit Question 7 of 25 4.0/ 4.0 Points If the capital markets are efficient, then the sale or purchase ofany securityat the prevailing marketprice is: A.Always a positive NPV transaction B.Generally a zero NPV transaction C.Is always a negative NPV transaction D.None of the above Question 8 of 25 0.0/ 4.0 Points Briefly describe the traditional position on capital structure. Question 9 of 25 4.0/ 4.0 Points Profitability ratios indicate: I) How productively is the firm utilizing its assets. II) How liquid is the firm. III) How profitable is the firm. IV) How highly is the firm valued by the investors. Question 10 of 25 3.5/ 4.0 Points What are the primaryreasons for a companyto use debt in its capital structure? Question 11 of 25 4.0/ 4.0 Points The difference between CurrentAssets of a firm and its CurrentLiabilities is called. A.Net worth B.Net working capital C.Gross working capital D.None of the above Question 12 of 25 3.5/ 4.0 Points What are the three basic financial statements? Question 13 of 25 4.0/ 4.0 Points The cash budgetis the primaryshort-term financial planning tool.The key reasons a cash budgetis created are:
- 3. I) To estimate your investmentin assets II) To estimate the size and timing of your new cash flows III) To prepare for potential financing needs Question 14 of 25 4.0/ 4.0 Points Firms can repurchase shares in the following ways: I) Open marketrepurchase II) Through a tender offer III) Through a Dutch auction process IV) Through directnegotiation with a major shareholder Question 15 of 25 4.0/ 4.0 Points Stock price cycles or patterns self-destructas soon as investors recognize them through: A.stock marketregulation by the Securities and Exchange Commission (SEC) B.price fixing by the specialists on New York Stock Exchange C.trading by the investors D.none of the above Question 16 of 25 4.0/ 4.0 Points Which of the following is a statementof semi-strong form efficiency? I) If the markets are efficientin the semi-strong form then prices will adjustimmediatelyto public information II) If the markets are efficientin the semi-strong form then prices reflectall information III) If the markets are efficient in the semi-strong form then prices will adjustto newly published information after a long time delay Question 17 of 25 4.0/ 4.0 Points Net working capital is defined as: A.The current assets in a business B.The difference between current assets and currentliabilities C.The presentvalue of all short-term cash flows D.The difference between all assets and liabilities Question 18 of 25 4.0/ 4.0 Points If a firm permanentlyborrows $100 million atan interestrate of 8%, what is the presentvalue of the interesttax shield? (Assume thatthe tax rate is 30%) A.$8.00 million B.$5.6 million C.$30 million D.$26.67 million E.None of the above Question 19 of 25 0.0/ 4.0 Points The difference between Total Assets of a firm and its Total Liabilities is called. A.Net working capital B.Net current assets C.Net worth D.None of the above
- 4. Question 20 of 25 0.0/ 4.0 Points Capital structure is irrelevantif: A.the capital markets are perfect B.each investor holds a fully diversified portfolio C.each investor holds the same proportion ofdebtand equity of the firm D.all of the above Question 21 of 25 4.0/ 4.0 Points In order to find the presentvalue of the tax shields provided bydebt, the discountrate used is the: A.cost of capital B.cost of equity C.costof debt D.none of the above Question 22 of 25 3.5/ 4.0 Points What are the common ratios used to measure liquidityof a firm? Question 23 of 25 2.5/ 4.0 Points What is the model that is used to prepare a pro-forma statement? Question 24 of 25 3.5/ 4.0 Points Briefly explain the information contentof share repurchase. Question 25 of 25 4.0/ 4.0 Points Generally, a firm is able to find positive NPV opportunities with: I) Financing decisions II) Capital investmentdecisions III) Short-term borrowing decisions