17. You currently own 50 shares of stock in Beverly Brothers Inc. The stock currently trades at $60 a share. The company is contemplating a 3-for-1 stock split. Which of the following best describes your position after the proposed stock split takes place?

		You will have 50 shares of stock with $60 a share.
		You will have 50 shares of stock with $20 a share.
		You will have 150 shares of stock with $60 a share.
		You will have 150 shares of stock with $20 a share.

Which of the following statements correctly describe the reasons why firms hold cash even though cash doesnt earn interests?

		Firms hold transaction cash for routine payments and collections.
		Firms reserve precautionary cash for random and unforeseen fluctuations in cash flows.
		Firms hold cash to take advantage of bargains, discounts, etc.
		All of the statements above are correct.

If a firm borrows $100M from a commercial bank with interest rate 8%. But the bank requires the firm to put 5% of the total borrowings in the bank as a compensating balance. Whats the real cost of the debt?

		5.0%
		8.42%
		9.56%
		8.0%