1. Which of the following is true: If the manager increases the firm's D/E ratio:
A. The firm's stock will have a higher expected return and less risk.
B. The firm's stock will have a lower expected return and more risk.
C. The firm's stock will have a higher expected return and more risk.
D. The firm's stock will have a lower expected return and less risk.
2. On an average day, Goose Down Feathers receives $1,000 in checks from customers. These checks clear the bank in an average of 4 days. The applicable daily interest rate is 0 percent. What is the present value of the float? Assume each month has 30 days.
$2,448.00
$244.00
$192.00
$100.00
$4,000.00