Finance single choice

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Question Answer
Preferred stock dividend can be paid:
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as a percentage of face value
When assessing the tax shield benefits for the company, we take into consideration
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corporate income tax
The goal of financial managers of corporation is
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To maximize the wealth of shareholders
Cash flow statement changes in notes payable
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Are placed in financing activities category
The main market value ratio is
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Price to earnings ratio
The issuer of the bond has the right to redeem it before the final maturity
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Callable bonds
Common stock dividend is paid
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None of the above answers is correct (from profit of the firm)
In analyzing a firm’s performance, liquidity ratios
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Measure profitability with respect to assets, Assess the firms ability to use its assets productively in
The greater the firm's net working capital:
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the lower the risk and the lower the profitability
The common stock entry reflects:
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the par value of common stock outstanding
The degree of operating leverage (DOL) measures
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the sensitivity of changes in EBIT to changes in Sales
Financial leases
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are long term
Nominal discount rate should be used
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Always to discount future cash flows (does not matter nominal or real)
The firms board is elected by:
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the common equity holders
The agency problem in big corporation is connected with fact that:
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The managers don’t act in ways which maximize owners profits
The current yield is higher than the bonds yield maturity
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only for premium bonds
We should accept the project if its NPV is:
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greater than 0
The degree of operating leverage (DOL) measures:
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the sensitivity of changes in EBIT to changes in sales
If security market prices reflect all the information contained in the record of past prices, we might envisage
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a strong of market efficiency
Forms of short term spontaneous financing:
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accruals

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