Question
12.Which of the following statements is NOT correct? New common stock is typically the most expensive form of equity, followed by retained earnings and then
12.Which of the following statements is NOT correct?
New common stock is typically the most expensive form of equity, followed by retained earnings and then preferred stock. | |||||||||||||||||||||||||||||||||||||||||||||
The before-tax cost of debt is used as the component cost of debt for purposes of developing the firm's weighted average cost of capital. | |||||||||||||||||||||||||||||||||||||||||||||
In practice, most firms operate under conditions of capital rationing because they have more acceptable independent projects than they can fund. | |||||||||||||||||||||||||||||||||||||||||||||
The capital structure that minimizes a firm's weighted average cost of capital also maximizes its stock price.
13. A firm's financial data are shown below, along with the days sales outstanding (DSO) of the firm against which it benchmarks. The firm's new CFO believes that the company could reduce its accounts receivable enough to reduce its DSO to the benchmarks' average, with no change on annual sales (annual sales remain the same). If this were done, by how much would accounts receivable decline? Use a 365-day year. DSO is the same as average collection period (ACP). Annual sales = $110,000 Accounts receivable = $16,000 Days sales outstanding (DSO) = 53.09 days Benchmarks' days sales outstanding (DSO) = 20 days Question 13 options:
Which of the following statements is correct?
Question 17 options:
Which of the following statements is NOT correct? Question 19 options:
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