1. A firm's dividend policy impacts the firm's ability to fiance through
a. retained earnings
b. stock issue
c. long tern debt
d. none of the above
2. If the bond's coupon rate is GREATER than the general interest rates in the market, the bond will sell at a
a. Premium
b. discount
c. neither a or b
3. The quantitative method that often serves as an indicator of a firm's ability to meet contratual obligations is
a. recieveables turnover
b. inventory turnover
c. ROE
d. coverage ratio
e. none of the above
3. The cost of capital can be defined as
a. the weighted average cost of attracting investors to the firm
b. the price of obtained funding for the firm weighted according to target ratios in the capital structure
c. less than the weighted average return that investors in the firm require.
d. a and b
e. a, b, and c
4. Sources of equity are
a. retained earnings
b. stock issue
c. covertible securities
d. all of the above
5. flecibility issues are those which
a. deal with a company's financing reserves
b. impact the debt capacity that a firm should maintain
c. all of the above
6. Earl Jason is saving for a pair of jet skis. How much money must Earl put aside now to receive $14,000 six years from now if the money is compounding at an 8% annual compound rate?
a. $8847
b. $8800
c. $8822
d. $8810
e. none of the above
8. A bond which is valued at par has a yield to maturity which is ____ to its coupon rate.
a. equal to
b. greater than
c. less than
d. none of the above
9. When projected assets are more than projected liabilities and owners equity, the plug will be
a. notes payable
b. notes receivable
c. cash
d. none of the above
10. most bonds pay interest
a. monthly
b. quarterly
c. semiannually
d. annually
e. none of the above