Question
1. A traditional bond: Has both an interest coupon and a face value. Is only issued by Fortune 500 companies. Tends to have a maturity
1. A traditional bond:
Has both an interest coupon and a face value.
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Is only issued by Fortune 500 companies.
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Tends to have a maturity of five years or less.
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Is no longer popular with investors.
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2.
All of the following are data rules are associated with capital budgeting except:
A. | Use cash flow numbers only.
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B. | Never consider inflation effects in capital budgeting
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C. | Use incremental numbers only | |
D. | Include the effects of the project on quality and cycle time.
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3.
Riise Company can sell a new issue of preferred stock to investors who require a 10% rate of return. What is the cost of the new issue if the flotation cost to issue each $100.00 face value share is 4% of face value?
A. | 4.00%.
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B. | 6.00%.
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C. | 10.00%.
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D. | 10.42%. |
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